The gap is growing between the rich and poor — at Wall Street banks. While the overall bonus pie may shrink by 30 percent this year, some star bankers are set to get bigger slices at the expense of their less-savvy brethren, as bosses worry that smaller pay-outs would lead to an exodus of talent.
“Wall Street is becoming much more of a meritocracy,” says Paul Sorbera, president of Wall Street executive recruiter Alliance Consulting. “Those who performed well need to get paid, and if they [aren’t], someone else is going to hire them.”
Before, top bankers might be subject to a sort of “franchise tax,” where the bosses could argue the stars did well because they worked at the firm, so the spoils should be shared.
“Today, people are saying, ‘I could do pretty well at a competitor’s,’ ” Sorbera says. “Managers have to think about what would happen if they lose that talent.”
“The good people that firms are really afraid of losing will be paid very well, but maybe not as well when other high-margin businesses aren’t there to subsidize them,” says Richard Lipstein, a managing director at executive-search firm Boyden. “It will be much more difficult to pay those bankers who didn’t do as well.”
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