Johnson Associates In The Press

Many private-equity firms are “a bit heavy on head count” after more than a decade of continual growth and hiring, said Chris Connors, a principal at Wall Street compensation consultant Johnson Associates.

Now some firms are focused on “curtailing expenses and cost management,” in some cases by replacing senior with junior employees or not filling openings when workers leave, Connors said.

The Wall Street Journal (WSJ Pro Private Equity) / May 28, 2024

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“As businesses have become more diversified and global, some of the non-revenue-generating roles at insurers and other large financial services companies have gotten significantly larger and you’re seeing this manifest in proxies,” said Chris Connors, a principal at compensation consulting firm Johnson Associates. These roles often include chief legal officer, chief technology officer, chief operating officer and even chief asset management officer at some companies, he said.

P & C Specialist / May 15, 2024

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Bankers who underwrite debts may see payouts swell as much as 25% as deals pick up this year, according to a report Tuesday from compensation consultant Johnson Associates Inc. For bond traders and equity underwriters, incentives may rise 20%.

“In general, employees in financial services should be pretty pleased: The amount of money they earn will match the results,” Alan Johnson, the firm’s managing director, said in an interview. “If you are in a business that manages costs, and generates significant profits, pay will follow along.”

Financial industry bonuses last swelled so much when the pandemic set off a tidal wave of trading and dealmaking. But that proved temporary, leading to “unrealistic expectations” among employees about future compensation, and then disappointment in the years that followed, Johnson said.

“This should be more sustainable growth, as businesses move ahead at a moderate rate,” Johnson said.

Beyond wealth management, people working in asset management may see a bump of about 5% on the back of market appreciation. At hedge funds, incentive compensation is also likely to be up 5%, helped by returns and inflows.

“Fifteen years ago people thought financial advisers were the dinosaur, which has made a full recovery, and is now a business people want to be in, with steady fees and diversified clients,” Johnson said.

Bloomberg / May 7, 2024

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Bonuses are poised to recover on Wall Street this year, fueled by strong equity market gains and recovery in investment banking, according to financial services compensation firm Johnson Associates.

Investment bankers helping companies issue debt are expected to have the highest raises in bonuses this year, from 15% to 25%, as companies sell record volumes of debt.  As initial public offerings come back, bonuses for equity underwriters are expected to rise 10% to 20% this year.

“We are seeing almost all segments on Wall Street raising compensation”, said the firm’s founder Alan Johnson. “This should be a good year, although there are risks stemming from elections in the U.S. and global conflicts”.

Although improving, incentives in investment banking are still far from their peak in 2021. The only segment where pay is above the 2021 level is private equity, but the workforce at these companies is considerably smaller than in banks, Johnson said.

Reuters / May 7, 2024

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Asset managers typically use non-competes when hiring certain C-suite executives, portfolio managers and other “high-end” roles, especially in technology and alternatives, said Alan Johnson, a managing partner at compensation consultancy Johnson Associates. It is also fairly common for top distribution, sales or product development leaders to have non-compete agreements, as reported.

The ban may also cause shops to think twice about lift-outs or recruiting talent to start new strategies. “I can’t even really tie you down,” said Johnson. “I’m going to pay you to develop this product and you go compete with me tomorrow?”

The FTC noted that employers already have trade secret laws and non-disclosure agreements at their disposal to protect sensitive information, and that more than 95% of workers with non-competes also have an NDA.

Still, such non-disclosure and non-solicitation agreements may get more “elaborate,” said Johnson the comp consultant. “[Y]ou’re going to have to be draconian,” he said.

Firms may also consider shifting certain roles overseas as a workaround, while stipulating in contracts with new hires that the firm has a right to move the employee, he added.

FundFire / April 29, 2024

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Meanwhile, each Kansas City Chiefs player is slated for $338,000 in bonus pay…

In the world of professional sports, six-figure sums are small potatoes. Super Bowl MVP Patrick Mahomes is working under a 10-year contract worth $450 million, according to Spotrac.

“This is not even chump change for him,” said Alan Johnson, managing director at Johnson Associates, a financial-services compensation consulting firm.

The stock market made a comeback in 2023, but the recently concluded year isn’t looking so hot for Wall Street bonuses, according to Johnson.

The 2023 bonuses getting paid out in 2024 are projected to stay flat or decline, according to Johnson’s firm. For example, people in investment-banking advisory work may see a 15% to 25% year-over-year drop in the value of their cash bonuses and equity awards, according to the firm.

Johnson’s firm analyzes different bonus figures from a tighter range of financial professionals than the Comptroller’s Office does. By his count, a yearly bonus in the range of $300,000 to $500,000 is common, Johnson said. Seven-figure bonuses “are not common” and reserved for the top 5% to 10% people at a firm, he said.

Wall Street bonuses aren’t just icing on the cake of finance jobs: They often represent a large chunk of a Wall Street employee’s compensation. For lower-level employees with bonuses in the $300,000 to $500,000 range, their bonus could be 50% of their pay. For Wall Streeters with a seven-figure bonus, that might be 60% to 80% of their pay, he said.

Johnson sees pay parallels between the football field and the C-suite. Each career can be short-lived with cutthroat competition and lots of burnout.

Careers in the high end of financial services can typically end in a person’s early 50s, he said. It’s safe to say a football-playing career is even shorter.

“For the amount of money these people make, it should be a grind, it should be competitive,” Johnson said. That statement holds true for both finance and football, he noted.

MarketWatch / February 12, 2024

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Bonuses dropped by as much as 25% for the year, according to compensation consultancy Johnson Associates.

“After a terrible ‘22, people were hoping that things would be a lot better — but they weren’t,” Alan Johnson, CEO of Johnson Associates, tells The Finance Files. “Most people were pretty disappointed.”

Johnson says that, for many bankers in M&A, bonuses for 2023 could be less than half of what they received in a year like 2021. “If you made a million-dollar bonus in ‘21 and now you’re making $400,000 — compared to the real world, these numbers are a huge amount of money, but it’s still a heck of a lot less than a million.”

Johnson expects that many finance professionals will look for new jobs after the latest round of announcements, but “unfortunately, for the ones who are looking, there are not that many jobs.”

He says firms are always willing to talk to candidates they consider “superstars,” but “if you’re good or great, it’s going to be hard to find a better job somewhere else.” In other words, “there will be a lot of people locked in.”

For those sticking it out, Johnson says next year should look better for pay and job mobility.

Not every business was hit as hard as those in dealmaking, Johnson notes. Private credit did “pretty well,” and wealth management businesses within big banks performed better than other lines of business across the finance sector, he says.

Meanwhile, of the major banks that have reported executive pay for 2023, the changes are mixed. According to Johnson Associates principal Chris Connors, executive compensation within financial services will range up or down about 5%, but will generally be flat compared to 2022.

Increasingly, executive compensation is determined more on the basis of corporate objectives or “a scorecard approach,” Connors adds, “as opposed to moving up or down in lockstep with the broader incentive pools.”

The Finance Files / February 8, 2024

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According to Alan Johnson, managing director at executive pay consulting firm Johnson Associates, boards in the financial services sector are struggling with how to set performance goals for certain equity compensation plans because the sector is heavily impacted by short-term turbulence.

Additionally, it has become increasingly difficult to forecast how the market will behave over the next three to four years, which makes it challenging to establish long-term performance goals for executive pay as well, said Johnson.

These challenges are not new to the financial services sector, but it’s become more difficult lately because of consolidation, changing fee levels and other impacts — making compensation in the sector less stable than it was five or 10 years ago, he said.

M&A activity has been very disappointing in the last few years, said Johnson. There was hope that last year’s activity would return to previous higher levels of activity after a “very dismal” 2022, but that turnaround hasn’t happened yet, he said, adding that financial firms have gone through some cost-containment measures as a result.

Indeed, looking to 2024, firms are cautiously optimistic about an uptick in activity, but not wildly so, causing them to manage their costs and headcounts quite tightly, said Johnson.

Agenda / February 5, 2024

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“As you look at the firm-by-firm data, each bank is starting from a different place,” said Chris Connors of Wall Street compensation consultant Johnson Associates…

“With bonus pools generally down, the strongest performers take a relatively outsized portion,” said Connors. “As the banks await an M&A rebound, they want to retain their best performers. On the flip side, they may be okay with their weaker performers voluntarily leaving.”

“Strong performers with long track records have had, and will have, opportunities to move,” said Connors.

Financial News / February 4, 2024

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This bonus season is shaping up to be another underwhelming one for bankers on Wall Street as lackluster deal activity pushes down the closely watched annual payouts.

The bonuses that some bankers are getting are flat or down from what they received a year earlier, bank employees and recruiters said. Investment-banking bonuses have fallen as much as 25% so far, according to Johnson Associates, a Wall Street compensation consultant. And those payments are down from what already qualified as an underwhelming bonus season a year ago…

“It’s disappointing,” said Alan Johnson, managing director of Johnson Associates. “Everyone was hoping for a business rebound.”

Johnson Associates estimates that some traders are up slightly, while many others are down 5% to 10%—in line with the firm’s November forecasts. Bonuses to investment managers are falling into a similar range.

The Wall Street Journal / January 28, 2024

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An annual report from compensation consulting firm Johnson Associates at the end of last year predicted bankers could see bonuses dropping 15% to 25% this season.

“Most Wall Street professionals will have to wait another year for a rebound in year-end bonuses,” Alan Johnson, managing director of the firm, said. “For most… it will be another disappointing year.”

Of course, the issue is that most bankers think they’re the exception to the rule — and will be the outlier who gets compensated well. At the same time, many young bankers have inflated expectations after receiving record bonuses for the 2021 fiscal year.

New York Post / January 25, 2024

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The year 2023 was marked by industry-wide layoffs, bank failings, and slow but unsure disinflation that left Wall Street wary. So this year, many bank and hedge fund professionals can expect lackluster bonus checks for a second year in a row, according to Wall Street compensation expert Alan Johnson, with most remaining flat or slumping even further from 2022. There will be some exceptions, he said, including for equity underwriting, retail and commercial bankers at large institutions, and wealth management. His firm, Johnson & Associates, laid out these bonus predictions in November, as previously reported by Business Insider.

Bonus pools for traders are expected to be largely flat with some small bumps at Goldman and BofA, Bloomberg reported in late December.

People looking to leave a firm usually wait until their bonus checks clear, Johnson explained, and sometimes a disappointing bonus pushes someone to go. But there may be less of that this year, he said.

“There are many fewer job openings, and people are risk averse,” he said.

Business Insider / January 9, 2024

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A weak year for Wall Street businesses is pointing towards a sour bonus season.

It’s the second straight year of sagging compensation after a windfall in 2021, when markets surged and corporate dealmaking reached a frenzy. “It’s another disappointing year, and you overlay that with inflation, people’s incomes are down meaningfully,” said Alan Johnson, managing director at Johnson Associates.

The Wall Street Journal / November 14, 2023

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Employee incentive compensation at institutional firms, including investment banks and traditional and alternatives managers, could fall between 5 and 25 percent, a new analysis from compensation consulting firm Johnson Associates…

“If you overlay inflation and employee expectations, it’s going to be a hard year to manage morale,” said Alan Johnson, founder of the firm. “The other thing that’s happened is obviously the labor market has cooled dramatically… Employees, if they’re not happy with their pay, there will be fewer places to look at.”

Private equity firms may still be alluring for employees, though. Year-over-year, bonus compensation is expected to remain flat. But going beneath the surface, incentive fees, or carry, could start impacting the bottom line for employees.

“Over the last decade, there’s probably been an unusual amount of stability in carry payouts and the frequency in them,” Johnson explained. “Prior to that it was more episodic, but over the last decade, it’s been very predictable.”

Across the board, it’s clear that in institutional investment management, the party is, to some extent, over. Now it’s on leadership to manage employee expectations.

“The message should be: ‘You’re paid competitively and fairly compared to others,’” Johnson said. “’Within the firm, you’re paid well compared to your colleagues and with the market.’ People in this industry are paid well compared to what I call ‘the real world.’”

Institutional Investor / November 14, 2023

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Some C-suite jobs also command higher pay because the job has changed. “If you were the CFO 20 years ago, you were the chief accountant,” says Alan Johnson, a New York–based compensation consultant who focuses on financial executives. “Now your job is bigger and may have operations reporting to it.” For example, a Deloitte survey last year found that 28% of CFOs say their direct reports include their company’s chief information officer or other IT head.

One other factor may contribute to rising pay just below the CEO: Those positions largely escape public scrutiny. “Certainly there are outlandish pay packages,” says Johnson. “But when you’re getting beat on, the focus is almost always on the CEO. No one asks about the No. 2, 3, or 4 job.” In addition, pay for C-suite members other than the CEO and CFO aren’t always reported.

Fortune / August 2, 2023

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Among financial institutions, it’s been more of a mixed bag, with bigger winners and bigger losers than in recent years, said Alan Johnson, president of Johnson Associates.

“Usually there’s a vignette or two, but there are multiple this year,” he added. “We haven’t even had the debt crisis yet. It’s more uncertain and there’s greater variety than we would typically see.”

Compensation committees will have to have to take a closer look at how the uncertainty is affecting their company specifically when deciding incentive pay targets and payouts.

“Some years, you can put out a generality and say markets are up 20% or markets are down 20%,” Johnson said. “This year will depend on the bank or the firm; different departments may be up significantly, different departments may be down significantly. So, it’s not going to be a consistent, easy story. Do your homework — you’re going to have to know the markets you’re in, what’s really going on in those markets. This is going to be a year where the committees are really going to have to dig in.

“It’ll be disappointing,” Johnson said. “A majority, not all, but a majority of people will be disappointed.”

Agenda / May 30, 2023

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“The biggest change here, and the reason the SEC wanted to amend the rule, was to keep public reporting companies and their executives from essentially abusing the rule by creating new plans whenever they wanted to trade,” said Alan Johnson, a managing director at compensation consultancy Johnson Associates.

Agenda / May 30, 2023

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“It will be one of the most complicated years in the industry since the Great Recession,” Alan Johnson, managing director of Johnson Associates, told The Post. “Big banks are winning while regional banks are suffering big time.”

“It will be the year of the ‘haves’ and ‘have-nots,’” he added

Johnson predicts the most dramatic divergence in pay will be between those in investment banking advisory and those in retail and commercial banking.

The former could see year-end bonuses drop by 15% to 20% year over year, while the latter may see spikes between 10% to 20%, he said.

“For decades, the masters of the universe were the investment bankers but now they’re the ones getting hit hard,” Johnson said.

New York Post / May 9, 2023

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Workers at traditional asset management firms can expect even smaller bonus payments than last year, against a backdrop of rising interest rates, inflation and disparate performance across sectors, compensation consultancy Johnson Associates forecasts.

Despite increases in assets under management across traditional firms and efforts to rein in costs, Johnson Associates projects a 5% to 10% decline in 2023 incentives from 2022 levels.

“It’s a little counterintuitive,” said Alan Johnson, managing principal at Johnson Associates. “Stock markets are up some, not universally, but up moderately, and incentive pay is going to likely be down.”

Employee sweeteners at alternative shops won’t contract as much as their traditional counterparts, the consultancy predicts.

“As a group, they’ll probably stay flat [in terms of incentive funding],” Johnson said. “Commercial real estate has taken a huge hit; valuations are way down. People are beginning to realize that the habit of people being in the office in 2019 is not coming back.”

ohnson Associates has also predicted a modest increase in base salaries this year: 3.5% to 4%.

“Some salaries are moderately higher, but they’re not at all on par with, certainly, inflation in the last couple of years,” Johnson said. “Inflation is not a direct driver of pay, and the reality is many employees have lost ground in the last couple of years.”

The smaller bump follows a year when firms hiked base pay by 5%, 6% and more to compete in the tight labor market. The attention to base pay was at a level not seen “even [during] the financial crisis,” Johnson told FundFire in April 2022.

FundFire / May 9, 2023

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“It’s not a dire scenario, but banks are paring back the excesses from the last years and feel they are moderately overstaffed,” said compensation consultant Alan Johnson, who owns a consultancy that specializes in Wall Street pay…

Compensation was even lower for U.S. investment bankers, whose bonuses shrank about 30% to 50% from 2021 as deals dried up, estimated Johnson. Commercial bankers’ bonuses in the United States fell about 20%, he said.

Traders at U.S. banks bucked the trend, in some cases receiving modest gains in variable pay as trading activity flourished in volatile markets last year.

Banks have mainly been adjusting their staffing levels by not replacing employees who leave, said Johnson.

Reuters / April 5, 2023

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“This year is abnormally bad,” said Alan Johnson, managing director of Johnson Associates. “I think there will be a fair number of unhappy people. Some people will look for other jobs… But there will be layoffs, too.”

But Johnson says you should be concerned by the news even if you don’t work in finance.

Some people may think brokers make too much from home sales, he said, but they still want houses to sell because that’s good for their community, said Johnson. The same is true of bankers, he added.

Dealmaking is typically indicative of a healthy economic environment.

“This is a canary in the coalmine for the economy, if the canary dies that’s not good for anybody,” said Johnson.

CNN Business / November 16, 2022

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According to Chris Connors, vice president at Johnson Associates, this year is unique due to declines in both equities and fixed income.

“There’s kind of a double whammy in that the equities markets are down significantly, but also the fixed income market is down significantly,” he said by phone Monday. “That in tandem is hard on the long-only strategies.”

Johnson Associates estimates compensation changes based on its public and proprietary data, according to Connors. Investment bankers who work on underwriting will likely have it hardest this year, with bonus compensation falling by 40 to 45 percent year over year.

Their colleagues working on the advisory side of investment banks will see compensation fall by 15 to 20 percent, as will staff at equities-focused hedge funds. Johnson predicts that private equity employees will see a decline of 5 to 15 percent, depending on the size of the firm.

“There’s obviously been pressure on fundraising; valuations for portfolio companies are down,” Connors said. “That cocktail of what’s going on in the macro environment has hurt portfolio valuations at PE shops and venture capital in general.”

Looking ahead to 2023, Johnson Associates expects that firms will actually increase salaries. “We’re seeing salary pools increasing by 4 to 5 percent for next year, which is even higher than the 3 percent historical norms as firms kind of look to battle inflation,” Connors said. 

Institutional Investor / November 15, 2022

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“It’s a cyclical business, and it fell off of a cliff this year,” Alan Johnson, managing director of Johnson Associates, said in an interview. “There will be a lot of unhappy people by the end of the year.”

“We’ve gone from red-hot labor markets to a cool-down to layoffs,” Johnson said.

There are some bright spots ahead, with base salaries expected to increase 4% to 5% for a second straight year, according to the Johnson Associates report. But for public companies, pain in the stock market could negatively impact compensation, with equity prices falling below original grant values.

The same market tumult that’s hurt dealmakers has been good for equity and debt traders. As a result, equity traders are likely to see their incentive payments stay the same while their fixed-income colleagues are set to get a 15% to 20% increase. 

“Overall, that business will continue to be the star,” Johnson said of fixed-income trading, while those in equity underwriting and M&A bankers are likely to be disappointed by their end-of-year compensation. “They should see it coming, but deniability is always strong.”

“It will be surprising end of the year for most,” Johnson said. “They thought things would be better. They had job offers, pay raises and patted themselves on the back repeatedly. Now it doesn’t feel so good.”

Bloomberg / November 15, 2022

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“For more senior positions, I think it will have less impact because salary is a smaller part of pay,” Alan Johnson, the managing director of the compensation consultancy Johnson Associates, told Insider in an interview.

Still, firms are worried about the legal impact of the rules.

“Maybe the biggest thing is, people are worried about litigation,” Johnson said. They’re wondering, “are we going to get sued over this? Will law firms take advantage of the ambiguities of the law?”

He also said he does expect the new law to have a bigger impact on the workforce at banks as opposed to asset managers.

“I think banks have unique problems because they have so many administrative employees. Many money managers don’t have that many administrative jobs compared to banks,” Johnson said, noting that banks may have tens of thousands of staff in administrative roles whose pay is mostly salary.

Business Insider / November 1, 2022

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Economic headwinds, including the threat of a recession, may have a negative impact on diversity within the asset management industry, some recruiters told FundFire…

A slower economy will mean less hiring from outside the industry and less hiring in the bottom and middle ranks, said Alan Johnson, the managing director of Johnson Associates.

“If we’re having less intake, and that intake is more within the industry, we’re naturally going to have less progress on diversity,” he said. “I don’t think it’s a lack of will, I just think it’s the circumstances.”

FundFire / September 21, 2022

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Still, for executives across Wall Street, assessing the requisite size for layoffs can be difficult. There are conflicting signs about the state of the U.S. economy, with some estimating that it may already be in a recession, or about to enter one, while others believe that there will be a slowdown but no contraction. And deal-making, which can return as quickly as it fades, has shown recent signs of optimism, like the upcoming initial public offering of Porsche, That makes bankers wary of finding themselves understaffed should deals begin to roar again.

But for now, Wall Street banks may simply have too many deal makers.

“They just don’t need as many bodies as they have,” said Chris Connors, a vice president at Johnson Associates, a compensation consulting firm. “Production has fallen off a cliff.”

The New York Times / September 12, 2022

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‘There are two key drivers contributing to the decrease,’ said Chris Connors, VP at Johnson Associates, ‘The primary driver is the market decline this year.’

Among fears of recession and rising inflation, major indices in the US are down this year, with the S&P down about 14% and the Bloomberg Aggregate Bond index down about 8%. Both have recovered since mid June when they were down some 23% and 12%, respectively.

Connors’ second factor, which is related to market falls, is the outflows suffered by many asset managers this year, especially from active equity funds. Investors pulled $408bn from active funds in the first six months of 2022, with $91bn of that leaving in June, according to data from Morningstar.

‘So the combination of those two things has led to a decrease in revenues in the asset management space, and bonus pools will decline as well,’ said Connors.

‘The purchasing power of the dollar is down because inflation is running rampant. So, if incentives are down 15% to 20%, and inflation is also at 8%, then your incentives are down more than 15% to 20%,’ said Connors, ‘So we think firms should be cognizant of this in terms of the salary increases, the impact of headcount going into the end of the year, and restructuring going into 2023.’

Citywire / August 5, 2022

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“2021 was a fabulous year and this is a real downer,” Alan Johnson, managing director of Johnson Associates, said in an interview. “We’ve had bonus declines before, but you overlay that with inflation by the end of the year and I think it’s going to be particularly painful.”

Investment-banking revenue fell 43% in the first six months of 2022 from a year earlier at the five biggest Wall Street firms. Persistent inflation, recession fears and global turmoil including Russia’s invasion of Ukraine brought on wild market swings, keeping clients on the sidelines. And the battle for banking talent has cooled, with the biggest companies more mindful of their expenses.

Equity traders, on the other hand, could see their bonuses climb 10%, while their fixed-income colleagues may enjoy a 20% increase, with the same market tumult boosting trading revenue.

“This year the traders will be subsidizing some of their colleagues in investment banking,” Johnson said. “You only like that if it’s coming toward you, not going away from you.”

“Seven-plus months into the end of the year, anything is possible, but it’s very, very unlikely it’s going to make too much of a comeback,” Johnson said. “Wall Street goes up and down — this is a down year.”

Bloomberg / August 4, 2022

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“There are going to be a lot of people who are down 50%,” Alan Johnson, managing director of the namesake firm, said in an interview. “What’s unusual about this is that it comes so soon after a terrific year last year. That, plus you have high inflation eating into people’s compensation.”

“We will have layoffs in some parts of Wall Street,” Johnson said, adding that job cuts may amount to 5% to 10% of staff. “I think many firms will want their headcount to be lower by February than it was this year.”

The news hasn’t been uniformly bad, however. Firms will have to boost workers’ base salary by roughly 5% because of wage inflation and retention needs, Johnson said.

What’s more, there have been sections of Wall Street that have thrived in the current environment. High volatility and choppy markets may dissuade corporations from issuing debt, but it’s a good setup for fixed income traders.

Bond traders and sales personnel will see bonuses rise by 15% to 20%, while equities trading staff could see increases of 5% to 10%, according to the report. Traders at hedge funds with a macro or quantitative strategy could see bonuses rise by 10% to 20%.

“My clients realize it will be a very difficult year,” Johnson said. “The challenge is how you communicate this and make sure the right people get paid.”

CNBC / August 4, 2022

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“It’s been a real shock,” Alan Johnson, managing director of the firm, told me. “I don’t think any of us really appreciated how much the pandemic stimulus created a bubble … now the lights have come on and it’s a little ugly.”

Of course, Johnson says, these firms are still very profitable. “They went from making two tons of money, now they’re going to make one ton of money,” he tells me. “But it’s still a ton of money.”

It’s no surprise that Wall Street bonuses should wax and wane with the fate of the markets. But what’s shocking to Johnson is how fast the tables turned this year. Banks that went on hiring sprees in the boomtimes of 2021 are in a bind now, likely realizing in hindsight they overstaffed. “There will be layoffs — not massive layoffs, but I they’ll certainly be layoffs at the end of the year,” Johnson says.

Of course, no one’s celebrating the prospect of handing out pink slips or scaling back pay. But neither is anyone throwing a pity party for the well-to-do Wall Streeters who are about to get haircut.

“The problems here are of course dwarfed by the problems of people in real world,” Johnson says. “It’s bad when your bonus goes for a $1 million to $600,000, but that’s still $600,000.”

CNN / August 4, 2022

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Tough times this year and a “mediocre” outlook for 2023 will prompt investment banks to cut 5% to 10% of their staff and reduce compensation for those who remain, said Alan Johnson, managing director at compensation consultancy firm Johnson Associates.

“They are not going to pay as well,” said Johnson. “People are putting lists together – usually this will begin after Labor Day. With the advantage of hindsight, firms have too many people.”

Reuters / July 26, 2022

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“With this steep decline in revenues, there will be lay-offs. Some have already quietly started. And we predict that it’s going to precipitate [accelerate] into the end of the year,” said Chris Connors of Johnson Associates, a pay consultancy in New York. Mayo said M&A advisers are less likely to get axed as companies are still using deals to adapt to a post-pandemic world or to find ways to grow in a downturn.

Financial Times / July 25, 2022

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Poor first quarter results would currently lead to a 5-10% fall in bonus payouts at commercial banks, according to research from Wall Street compensation consultancy Johnson Associates featured in an S&P Global Market Intelligence report.

The dip comes as a result of global economic factors such as the Russian invasion of Ukraine, rising interest rates, and inflation. According to Johnson Associates, bank revenue has also been hit by these factors leading to a marked decrease in equity underwriting and M&A advisory activity.

The research anticipated bonuses to drop by 35% to 40% by the end of the year. However, the consultancy also predicted that fixed income and equities trading desks could see increases of up to 20% and up to 10%, respectively, due to more client activity.

Banking Exchange / June 1, 2022

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Based on first-quarter revenue and cost trends, incentive funding at major investment and commercial banks is expected to fall by 5% to 10% in 2022, with investment bank underwriting desks seeing declines of up to 40%, Johnson Associates has estimated. Lower revenues will be the main driver of direct decreases in incentive pay, but inflation will make the situation worse, the financial services compensation consulting firm said in its latest sector report.

Following “an unbelievably good year,” underwriting revenues “dropped off a cliff” amid a slowdown in advisory in the first few months of 2022, Alan M. Johnson, managing director of Johnson Associates, said in an interview…

Trading revenues have held up well in the early part of 2022 thanks to greater market volatility, which will be reflected in the changes of incentive pay, Johnson said. While the general trend in 2022 is downward, there will be divergences between banks based on business mix, Johnson said.

S&P Global Market Intelligence / May 26, 2022

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“For the first time in decades, inflation has a significant impact on real compensation outcomes,” according to the report.

The consumer price index rose 8.5% between March 2021 and 2022, and rising interest rates are putting the brakes on corporate deal making.

The latest figures reported by Johnson represent a dimmer outlook for the year than the firm forecasted in 2021.

“I don’t think [bonuses] are going to up as much next year,” Managing Director Alan Johnson told CNBC in 2021.“But the view is ’22 will be a really good year.”

Banking Dive / May 6, 2022

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Last year was an unprecedented bonanza for Wall Street bankers — and it was fun while it lasted.

Bonuses for bankers at big financial firms — which hit record highs in 2021 amid a rash of big deals and a dire talent shortage on Wall Street — are expected to drop as much as 40% in 2022 as bank profits plummet, according to new data from compensation consulting firm Johnson Associates…

“Deals and IPOs are cyclical — we were expecting a hangover for 2022 but it’s worse than imagined,” Alan Johnson of Johnson Associates told The Post. “That’s brought deal making to a stop — and on top of that there’s a good chance we’re going into a recession.”

Johnson is quick to note that even a minimal dropoff in pay will feel dramatic given record inflation. “If pay is down 15% that’s going to feel like 22% or 23%,” Johnson adds.

It’s a dramatic turn of events for an industry that came roaring back to life amid the pandemic. But bonuses mirror the performance of banks — and banks have been struggling this year.

Last year top banks like Morgan Stanley and Goldman Sachs spent roughly 20% to 25% more on compensation — raising the cost of expenses significantly. This year, they may look to cut back.

“I think some of this uncertainty is why firms have been thoughtful and careful about bringing people back,” Johnson adds. “It’s a tough conversation to have with employees that pay is down and we want you to commute an hour a day.”

On the positive side, sales and trading divisions, which saw profits decline as pandemic volatility slowed in 2021, are expected to capitalize on market uncertainty yet again — and some traders may nab bonuses in 2022 that are 20% higher than the previous year.

New York Post / May 5, 2022

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Equity capital markets dealmakers are likely to see the biggest drop in bonuses this year, according to the latest survey by Johnson Associates, while most business lines are set to for a sharp decline compared to 2021, when deal fees surged to a record $130bn.

Bankers working on M&A transactions could see drops of up to 20% compared to last year, the survey predicts, while debt underwriting roles are set for a similar decline. In a reversal of fortunes, traders are expected to receive an increase this year as the Russia-Ukraine conflict has led to a surge in market volatility.

Fixed-income traders could receive 20% more, Johnson Associates predicts, while equities trader bonuses are set to rise by 5% to 10%.

Equity capital markets activity is down by 71% globally to $177.9bn in 2022, according to data provider Dealogic. Overall investment banking fees have slipped by 36% to $28.7bn.

The battle for top dealmakers is slowing, Alan Johnson, founder of Johnson Associates, told Financial News.

“Hiring was at a feverish pace last year and banks were facing real trouble finding the people they needed,” he said. “It’s gone from 100mph to 60mph — it’s still hot, but it has cooled off significantly since December.”

Banks have hiked salaries for junior staff in a bid to stem an exodus of talent amid a burnout crisis, with Bank of America, Barclays, Citigroup, JPMorgan, Morgan Stanley and UBS among those to have increased pay at least twice over the past year. Salary increases have extended to the senior ranks at some banks.

“Most banks manage their compensation by adding bonuses and base pay, so the salary increases will have a knock in effect of hitting overall pay. Bonuses would have been down anyway, but this is a double impact this year,” said Johnson.

Dow Jones Financial News / May 5, 2022

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Excluding the impact of inflation, bonuses paid to professionals in traditional asset management firms are projected to fall by 10% to 15% by year-end 2022 compared with the prior year-end, due to assets under management and revenues falling on “market decline and moderate outflows as clients de-risk,” the report said.

For professionals at mega-size private equity firms, bonus payments should be flat compared with last year, the report said, while those employed at mid- to large-size private equity firms are likely to see their bonus payouts fall by 5% to 10%, the report noted, partly due to a “slowdown in fundraising and fewer realizations.”

Mega private equity firms are those with at least $50 billion in AUM, while midsize to large are firms with between $5 billion and $50 billion AUM, said Chris Connors, vice president at Johnson, in an email.

Pensions & Investments / May 5, 2022

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At Mastercard, annual bonuses are based on several factors which make up a corporate score, a company representative told me. Up to 10% of the total corporate score represents how the company performed against ESG goals. Individual performance is the final component of the bonus calculation. This method is how executives were measured last year and will be used for the bonus calculations for all employees this year, the representative said.

I asked Alan Johnson, whose New York City consulting firm Johnson Associates advises major companies on pay, about this new approach. “I think [Miebach] is trying to send a good cultural signal of sharing in the success of all the goals,” he says. But can the average worker really influence, say, emissions? “It may not be motivational for most employees who don’t have a lot of visibility or control over these very important things. For most people, they’re pretty far away,” he says. He thinks a better approach could be to give one more measurable goal to all employees in an area where it makes sense. For instance, finance types could have “financial inclusion” be part of their score.

Fortune CFO Daily / April 27, 2022

A tight labor market is pressuring asset managers to reshape their compensation and benefits packages as more professionals consider new job opportunities. And while firms typically use bonuses to sweeten offers, base salaries are getting more attention, according to compensation consultancy Johnson Associates.

“Even [during] the financial crisis, we didn’t have as much focus on base salaries,” Alan Johnson, Johnson Associates’ managing director, told FundFire. “One of the peculiarities in financial services is that base salaries, from time to time, will lag because appropriately in asset management and other parts of financial services, they want to emphasize performance. But having unduly low base salaries is usually not a good idea,… particularly with the talent competition that we have today.”

A growing number of managers are increasing base pay by 5%, 6% and even higher, instead of the customary 3% annual raise, Johnson said during a client presentation in March. Decisions to bump up base salaries occurred in the fall of 2021, “really before we all became very in tune with the idea that inflation is very high,” Johnson told FundFire.

It’s hard to explain low base salaries during this competitive recruitment process, he added.

“It sends an odd message – you’re making excuses even before you begin the discussion,” Johnson said. “We tell clients you don’t have to have unusually high base salaries, but you need to be at least competitive, so it’s, at a minimum, a non-issue.”

Johnson’s early predictions, based on the first quarter, suggest the significant compensation increases of 2021 are unlikely this year. In the fourth quarter last year, the consultancy expected a 15% increase in asset management bonuses for that year. In 2020, those incentives jumped by 5% at the most, according to Johnson…

Similarly, managers should standardize base salaries among employees with the same role, Johnson said during the presentation.

“Many firms spend an enormous amount of energy around individual base-salary increases, but often with very little impact,” Johnson said. “If we look at… a group of investment professionals, [and] a group of operations [or] technology professionals at the same level, the salaries overlap to the point that it’s difficult to explain why the salaries are what they are.”

FundFire / April 18, 2022

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“I’ve had more discussions about this in the last three months than in 20 years,” says Alan Johnson, whose New York City consulting firm Johnson Associates advises major companies on pay…

In the same way, high inflation may frighten retirees, or those planning to retire, whose nest eggs look alarmingly inadequate at 7.5% inflation versus the 2% inflation of years past. “If you’re hearing medical bills are going up, rent’s going up, food’s going up, you look at your significant other and say, ‘Is this really the time we want to walk away from our jobs?’” Johnson says. If workers who would otherwise leave the job market stay, the effect will again be downward pressure on pay…

Can a company become an employer of choice by promising to keep wages inflation-adjusted?

While tempting, some say the decision may not be wise. Employers should pledge to offer salaries that are competitive in relation to the marketplace and employees’ skills. But they should refrain from promising to keep wages inflation-adjusted, Johnson says. “Sooner or later inflation will spike, the economy will tank, and then you can’t afford it. Now you’ve lied to people.”

Fortune / April 13, 2022

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“I’ve had more discussions about this in the last three months than in 20 years,” says Alan Johnson, whose New York City consulting firm Johnson Associates advises major companies on pay…

In the same way, high inflation may frighten retirees, or those planning to retire, whose nest eggs look alarmingly inadequate at 7.5% inflation versus the 2% inflation of years past. “If you’re hearing medical bills are going up, rent’s going up, food’s going up, you look at your significant other and say, ‘Is this really the time we want to walk away from our jobs?’” Johnson says. If workers who would otherwise leave the job market stay, the effect will again be downward pressure on pay.

Can a company become an employer of choice by promising to keep wages inflation-adjusted?

While tempting, some say the decision may not be wise. Employers should pledge to offer salaries that are competitive in relation to the marketplace and employees’ skills. But they should refrain from promising to keep wages inflation-adjusted, Johnson says. “Sooner or later inflation will spike, the economy will tank, and then you can’t afford it. Now you’ve lied to people.”

Fortune / February 15, 2022

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Up and down Wall Street, droves of bankers are changing jobs — switching banks, moving to investment firms, taking equity stakes in financial technology companies or cryptocurrency start-ups — and sometimes getting out altogether. Pandemic-inspired ennui, blockbuster profits and a war for talent across the industry has accelerated the job churn at the country’s big banks.

“People are exhausted,” said Alan Johnson, the managing director of Johnson Associates, a Wall Street compensation consultancy. The ranks of those earning $10 million or more will grow amid competition for top performers after a bumper year for earnings, Mr. Johnson said, but “money doesn’t always make you happy.”

The New York Times / February 8, 2022

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Despite market volatility this month, the industry has a strong tailwind at its back, said Alan Johnson, managing director at compensation consultancy Johnson Associates. But concerns around office location and work approaches, something people wouldn’t have talked about a few years ago, have become a much bigger issue, he added.

“The whole location and how often you have to come into the office is something that wouldn’t have happened three years ago and now it’s part of every conversation,” he said…

Amid the competitive environment, firms are now talking about employees’ mental health and the resources they have available, Johnson added.

“They’ve tried to make sure people know there are confidential resources if they are struggling,” he said, adding that “after two years people are really tired.”

FundFire / January 26, 2022

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“It’s wild how hot the labor market is,” said Alan Johnson, a consultant who helps financial firms design their pay programs. “You’ve got crypto, you’ve got tech,” he said, plus the ever-present “siren song of private equity,” which pays far more than banks do…

The payouts come after a go-go year that generated record revenue for banks but widespread burnout among their workers. Mr. Johnson said he counseled his clients not to expect outpourings of gratitude.

“No matter how much you pay them, people believe that with all the stress they’ve gone through, they deserved more,” he said.

The Wall Street Journal / January 20, 2022

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“The reaction [from bankers] usually would be very positive after this kind of pay year — we’ve told our clients to expect so-so to OK,” said Alan Johnson, managing director of Johnson Associates, a pay consultancy in New York. “The view is, I got paid a ton of money for ’21 but, boy, I earned it and I’m exhausted.”

Financial Times / January 20, 2022

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Money managers of all sizes are nervous about what industry pundits say is the industry’s hottest-ever talent war.

“Money managers are very optimistic about 2022, but also are very concerned about retention and recruitment because the hiring environment is so competitive right now,” said Alan Johnson, managing partner at Johnson Associates Inc., New York, a compensation advisory firm.

“2021 was a remarkably good year and bonuses will be higher. There may be a wave of departures after 2021 bonuses are awarded in January and February,” he added.

The firm estimates that 2021 bonuses will average 15% higher than in the prior year and Mr. Johnson said managers have revised their pay scales upward to win over candidates.

Pensions & Investments / January 10, 2022

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Wall Street is set to see the biggest bonus increases since the Great Recession after a busy and profitable 2021, according to a report from pay consultancy Johnson Associates.

Booming deal activity, a hot IPO market and climbing equities mean bankers and traders are in line for outsized performance-based compensation, the report released Tuesday said…

Firms are “very concerned about turnover, even though pay is going to be up significantly,” Johnson Associates managing director Alan Johnson told CNBC.

CNBC / November 16, 2021

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“There is a staffing shortage, so in addition to the pay levels, there’s a real demand for talent,” Alan Johnson, the managing director of Johnson Associates, said in an interview. “Every client we talk to is having difficulty getting recruits.”

“When you have a crisis, you usually have a lull in turnover, people get risk averse, hold onto their jobs, hunker down,” Mr. Johnson said. “But as we go to the middle of ’21 and ’22, there’s going to be more turnover.”

The New York Times / November 16, 2021

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“The banks can’t run the risk that their clients go to another bank to do these services, so they need to build up,” said Alan Johnson, managing director of Wall Street compensation consultancy Johnson Associates. “This is a big asset, a big opportunity, and they need people and need them in a hurry. They’re willing to pay a lot.”

And, as financial firms staff up, they have to compete with technology and crypto firms doing likewise — competition intensified by a scarcity of talent with both types of experience, recruiters said. That means a crypto job can be lucrative, with a related role at a bank commanding a 20% to 30% premium in total compensation over a comparable position at the same institution, according to Johnson.

Bloomberg / November 1, 2021

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“For the top five to 10 largest money management firms, 2021 has been a really good year and it’s unlikely that there will be a lot of changes among senior executives aside from normal retirements going forward,” said Alan Johnson, managing director at New York-based compensation specialist Johnson Associates Inc.

The firm’s estimate for 2021 incentive compensation for traditional and hedge fund money managers is an increase between 10% and 15%, while private equity incentive funding for megadeals likely will range from 15% and 20%, based on second-quarter earnings results of 10 managers.

Pensions & Investments / November 1, 2021

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“2021 will be a very strong year for investment banking and we anticipate firms paying bonuses that align with individual, group, and overall firm performance,” said Chris Connors, vice president at Wall Street compensation consultants, Johnson Associates.

While M&A and equity capital markets dealmakers will be the big winners, banks are unlikely to match bonuses to the stellar performance this year, he added.

“Banks typically overlay business unit results with overall firm results and we expect overall firm bonus pools to be +15% vs 2020. With that in mind, we expect incentives to increase 30%+ in equity underwriting and advisory,” said Connors.

Financial News / October 15, 2021

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Currently, there’s a greater focus by politicians and the public on income inequality, environmental issues, and diversity and inclusion, said Alan Johnson, managing partner at compensation consulting firm Johnson Associates. “I think those are not necessarily the traditional bank risk measures, but for a large, visible financial institution, they are going to be under more scrutiny, and it won’t be the traditional [risk issues such as] solvency.”

Rather than focusing on whether banks are lending to the wrong people or taking on unsustainable balance sheet risks, politicians are more likely to dig in on reputational risk and societal impact, Johnson said.

He expects a greater share of companies to introduce environmental, social and governance metrics, and particularly metrics having to do with diversity and inclusion, into their incentive plans for 2022. He said many companies are ascribing between 10% and 20% of annual bonuses to ESG.

Meanwhile, under rules by the Securities and Exchange Commission coming out of the 2007-2008 financial crisis, boards are required to probe compensation plans under their oversight duties with respect to enterprise risk management. For a large financial institution, most formal ERM reviews regarding compensation look at traditional balance sheet risk issues and the design of various incentive plans within the bank, Johnson said.

“The reputational risk is more at the executive level, and I think firms are trying to do that,” Johnson said. “The problem is, it’s a moving target…”

According to Johnson, well-designed incentive plans offer boards wide latitude to alter their course in the case of unexpected circumstances such as the pandemic, or reduce payouts when warranted. “If senior management messes up badly, they have the flexibility to pay dramatically less or fire them,” he said.

Agenda / September 20, 2021

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“After being down dramatically earlier in the year, it looks like pay is going to be up nicely this year — double digits for some people,” Alan Johnson, managing director at Johnson Associates, told Institutional Investor. “I think that’s a pleasant surprise because it was somewhat unexpected.”

In the first half of the year, alternatives carried the asset management industry. In fact, private equity funds saw a five-percentage-point increase in projected 2021 incentive funding from 2020 expectations. The PE sector saw massive upticks in fundraising and realizations, which ultimately led to the increase in compensation, according to the report.

“In asset management, the stars are the alternatives,” Johnson said. “Particularly, private equity is the queen of the ball.”

Johnson said the end-of-year compensation boosts will garner a “so-so” reaction from employees in the mentioned sectors: “I think the people in the industry will feel the pay increases are nice, but with all the stress and work and disruption that’s going on, I think people will feel just OK.”

For junior talent, Johnson said the comp increases may not be enough to keep them in the business after a year of minimal recruiting, decreased retention, and complaints of feeling overworked.

Institutional Investor / August 9, 2021

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Alan Johnson, managing director and compensation consultant at ​Johnson Associates, said that despite the big push from firms to hire more women and people of color, significant progress could be extremely slow — to the frustration of many.

“After 50 years of excuses, many people don’t want to hear any more excuses,” Johnson said.

But he thinks it will take years to see visible change in the industry, particularly at the leadership and senior level at money managers.

“You can’t create mid- to senior-level portfolio managers from scratch,” Johnson said. “It takes 10 to 15 years to get them to that level. And it will take a long time. If you don’t have that many people in your pipeline…unfortunately that’s going to be the reality.”

If firms can’t attract an influx of young minority professionals to the industry — as well as retain and develop them throughout their careers — the war for talent at the bargaining table won’t do much to improve the diversity picture on Wall Street.

And without a bigger-picture perspective, firms will still be vying for what may be a handful of minority professionals, particularly at senior levels, Johnson said.

Business Insider / August 5, 2021

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Even the most prestigious companies have struggled to retain junior employees in recent months as the mental toll of the pandemic and demanding expectations drive out young talent.

“There’s a shortage of experienced junior people,” said Alan Johnson, who is the managing director of Johnson Associates, a compensation consultancy that works with financial services firms. Landing a job at the most high-paying Wall Street companies is fiercely competitive among recent graduates. Retaining those employees, however, has caused headaches for executives…

Junior compensation plays a large role in giving employers an edge against competitors. Many professional services firms compete against one another to recruit talent from top universities. Offering higher salaries than industry rivals can help win over young talent, according to Johnson.

“I think they’re part of the same ecosystem,” Johnson said of major corporate jobs. “Many of those people recruit at the same schools, the same MBA programs, so coming out there’s similarity in pay and opportunity.”

Many companies participate in salary planning surveys to determine compensation levels within the industry and across different positions. That planning has taken on heightened importance this year as employers handle a surge in pandemic- and stress-driven departures by junior workers.

“We’ve told clients that the end-of-the-year pay process this year will be very important,” Johnson said. “It’s going to be a really important year, and make sure you pay people what you think you have to.”

SHRM / July 6, 2021

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A full-scale bidding war has broken out on Wall Street, this time over young bankers, as firms struggle to attract and keep talent after the pandemic added to famously crushing workloads…

“There’s a lot of competition for the best people,” said Alan Johnson, managing director of the Wall Street compensation consultancy Johnson Associates. “I think everyone is going to be moving to $100,000 now.”

Bloomberg / July 2, 2021

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JPMorgan Chase (JPM) is raising the salary of first-year analysts to $100,000, up from $85,000, a person familiar with the matter told CNN Business. The pay hike, which takes effect July 1, means some millennials and Gen Zers will be making six-figure salaries fresh out of college…

The hikes will make JPMorgan the most lucrative big bank for junior analysts — a shrewd move amid an ongoing war for talent between Wall Street and Silicon Valley, where many tech firms offer greater flexibility for remote work.

Alan Johnson, managing director at compensation consultant Johnson Associates, said the moves are a sign of “healthy business and a tight labor market.”

CNN Business / June 29, 2021

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Incentive compensation for equities traders may climb as much as 30% while underwriters could see a 40% jump, Johnson said Thursday. Stock underwriters — who worked on a record number of special-purpose acquisition companies in the first three months of the year — are “significantly outperforming” their counterparts in debt capital markets, the consultancy said.

Mergers-and-acquisition bankers are poised to see a jump in bonuses of 15% to 20%, Johnson said. Fixed-income traders are also on track for a boost in pay. Bonuses are typically awarded after year-end and changing market conditions in coming months could alter the compensation picture.

“Combining the remarkable business recovery and with stock-market highs, financial services incentive compensation is expected to increase meaningfully for 2021,” said Alan Johnson, managing director at Johnson Associates, said in an emailed statement.

Bloomberg / May 6, 2021

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Compensation consultants have long argued that owning stock best aligns the interests of the CEO with those of the company’s shareholders, who are the ultimate owners of the company. Yet companies also note that that sticking to pre-set financial goals during economic downturns may not reward corporate leaders for any critical decisions they make that ultimately protect their companies from financial harm or position them to flourish when times improve.

“No matter how good your incentive plan is, in one year out of 10 you are going to have to make adjustments as to what’s fair,” said Alan Johnson, one of the nation’s top compensation consultants. “When goals become impossible to achieve based on something you could never have anticipated, I am pretty sympathetic to [a company board that says], with the opportunity a CEO had, they did pretty well.”

CBS News / April 22, 2021

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“I think generally people think 2021 will be a better year financially and hopefully the workforce will get back. As we tell clients, I think pay is really important, but I think at the moment, the fatigue and stress of the employee workforce is at least as important,” says Alan Johnson, managing partner at Johnson Associates, a compensation consulting firm focused on the financial services industry. “We need to pay people fairly and based on their contribution, but you need to be increasingly on the lookout for their mental health.”

According to Johnson, for example, some boards have deliberated over mandating vacation time in 2021 because they noticed employees were leaving it untouched last year through the pandemic. “You need to manage your employees’ mental health, and I think that’s something that’s been neglected in the pandemic here.”

Johnson says he has also cautioned his clients that the pandemic is going to be a two-year phenomenon, rather than just one.

“We all hoped that when Jan. 1 came along it would be normal, but it’s not going to be normal.”

Agenda / March 8, 2021

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Growing societal awareness around inappropriate behavior in recent years, accelerated by the #MeToo movement, is forcing companies to be more transparent in cases of executive misconduct, said Alan Johnson, managing director at Johnson Associates Inc., a compensation consulting firm. “Historically, companies either did nothing or allowed people to leave quietly,” Mr. Johnson said. “That appears no longer possible,” he said.

The Wall Street Journal / February 10, 2021

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Critics warn that deferring more pay, with risk of forfeiture, could discourage executives from reporting misconduct and make it too easy for companies to rescind pay.

“If we make these penalties even more severe, are more people going to come forward or fewer?” said Alan Johnson, managing director of Johnson Associates, a financial-services industry pay-consulting firm. “Clawbacks are time-consuming and expensive—but if you’re taking back people’s pay, I think it should be.”

The Wall Street Journal / February 7, 2021

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“This is not a year for a lot of gobbledygook and lawyer-talk,” says Alan Johnson, managing partner at Johnson Associates, a compensation consulting firm that mainly works with financial services companies. “This would be a year for straightforwardness. They may disagree [about compensation decisions], but they won’t think you were hiding something or weren’t straightforward about what you were doing.”

Johnson says that while most of his clients have been largely insulated from the financial impact of the pandemic, he has emphasized with clients that it’s not the year to be “exaggerated” in pay for executives. Outside financial services, he says, it may be more complicated.

“I think firms need to be very sensitive to the optics of compensation. If you’ve laid off thousands of employees or had deaths in your workforce, to exaggerate executive pay would be [viewed negatively] this year,” he says.

Agenda / February 1, 2021

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“The fear that clients have is that they may be more susceptible to leaving now simply because they don’t have the cultural norms, they don’t have the personal loyalty or allegiances to people,” said Alan Johnson, head of compensation consulting firm Johnson Associates Inc.

Wall Street banks were already struggling to attract and retain young talent before the pandemic.

Investment firms and technology companies were luring young staff with comparable pay and shorter hours. Plus, Wall Street’s reputation suffered from the 2007-2009 financial crisis and a spate of junior-staffer deaths attributed to grueling schedules.

Banks rolled out policies to boost morale, including limits on how many hours analysts could work. But negative experiences during the pandemic may harm retention in an industry that sees about 85% of analysts leave investment banks within two years, according to recruiting firms.

“On the turnover side, March or April will begin to tell the tale,” Johnson said. “I have told (clients) they’re going to see an unusual amount.”

Reuters / January 27, 2021

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Wall Street banks have had a decent crisis so far. That is unlikely to translate to bumper bonus payments for bankers and traders, as chief executives and boards grapple with the optics of big payouts amid economic hardship on Main Street…

According to New York-based compensation consulting firm Johnson Associates, banking industry bonuses are likely to be flat overall compared with 2019 but with wide variations, with lower payouts in retail banking and higher payouts for equity and debt traders, salespeople and underwriters, and “unusual scrutiny” of pay for chief executive officers.

“Investment bankers on average are going to get paid more,” said Alan Johnson, head of the consulting firm. “It’s uncomfortable in the middle of a pandemic. Some of these people are not beloved to begin with and then we’re going to have stories about people going out and buying fancy cars, and fancy apartments, and that’s going to make a lot of people angry.”

The Wall Street Journal / January 7, 2021

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“The pandemic is wreaking havoc on many parts of the U.S. economy this year, and the financial services industry is no exception,” said Alan Johnson, managing director of Johnson Associates…

Even with an optimistic vaccine view, the pandemic will continue to weigh on the economy in 2021, but likely to a lesser degree than in 2020, the firm projects…

“For 2021, we expect some stabilization with early projections for modest salary increases, and flat to slightly increased incentives,” he said.

Seeking Alpha / November 15, 2020

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“The majority of professionals at traditional and alternative asset firms as well as retail and commercial bankers will see smaller bonuses,” said the firm’s managing director, Alan Johnson. “Conversely, fixed income pros will be rewarded handsomely as uncertainty and high volatility contributed to record trading.”

Hedge funders will have a check about 5 percent to 10 percent smaller to drop into their fleece-vest pockets, according to Johnson, as the industry has struggled to get back in the black after the shock of the spring.

“As compared to many sectors of the economy, select areas of financial services have rebounded,” Johnson said. “Unfortunately, as we look to 2021, even with an optimistic vaccine path, the pandemic will continue to negatively influence businesses, but perhaps to a lesser degree than in 2020.”

New York Post / November 12, 2020

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Experts see a small pay cut coming for executives at traditional asset managers, hedge funds, and private equity shops, particularly at smaller firms, given disruption in the underlying economy because of the coronavirus.

The predicted five-to-10 percent compensation drop would make for two down years in a row, according to Johnson Associates’ third-quarter report on year-end incentives.

But that average belies striking differences between the haves and have-nots in asset management…

Costs have continued to grow as investors want more hand-holding, data, and analytics, while compliance burdens expand, according to Johnson Associates. At the same time, investors continue to pressure managers for fee deals. Some asset managers are still cutting staff given shrinking asset bases or only modest inflows as the industry consolidates. Last month, for example, Morgan Stanley announced plans to buy asset manager Eaton Vance.

Institutional Investor / November 12, 2020

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“Financial services and banking has too many people,” said Alan Johnson, the head of compensation-consulting firm Johnson Associates Inc., who predicts the industry’s headcount will shrink 10% by mid-2021 from its level as the pandemic began. “Next year is going to be very low hiring. There’ll be some layoffs.”

One silver lining for job hunters now is that the industry’s unemployment rate of 3.1% last month is much lower than in sectors hit harder by the pandemic, such as the 15.9% rate for hospitality and food services, according to the Bureau of Labor Statistics. So for now, competition for openings isn’t too harsh.

Expect that to worsen in the coming months, said Johnson, the consultant.

“Firms are not hiring at the levels they were,” he said. The trajectory of economic recovery “is so unknown and it’s so uncertain and it’s so significant, and you overlay the pandemic and remote working and Zoom — if you’re a laid-off employee, this is a very difficult set of circumstances.”

Bloomberg / November 10, 2020

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“This is the first time since the financial crisis that we’ve had such a dramatic difference between parts of the big banks,” said Alan Johnson, founder of New York-based pay consultancy Johnson & Associates, referring to the gulf in the performance of the banks’ retail business and their advisory and trading divisions…

Johnson said issues around pay would be less contentious at Morgan Stanley and Goldman Sachs because they did not have the same exposure to coronavirus-related loan losses as the big lending banks. Morgan Stanley and Goldman have collectively taken just $3.5 billion in loan loss charges this year…

“It’s smart to message that [lower bonuses] now. . . .  If your income is up 50%, probably bonuses will be up 25%,” Johnson said, adding that bonuses would probably be significantly higher in fixed income, up by less in equities, and down in mergers and acquisitions, where fees are running below last year’s after deals dried up in the early months of the pandemic…

Johnson at Johnson Associates said that while the “very best” who were unhappy with their packages could “absolutely” move to another bank or hedge fund, the “good and the average” would have few options in the current environment.

Financial Times / October 18, 2020

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Hartford anticipated about $70 million in severance costs in the third quarter, according to its second-quarter results.

“They’re probably looking at getting whole head count down 10% or 12%” through both buyouts and layoffs, says Alan Johnson, president of compensation consulting firm Johnson Associates…

The fact that the pandemic now appears likely to stretch well into next year and possibly into 2022 may have played a role in the timing of the firm’s employee reduction, Johnson says.

“I generally advise clients to do [buyouts and layoffs] sooner rather than later and be as generous as you can possibly be with people,” he says. “The timing is terrible. But is it better to wait and not tell people the truth and be cheap with severance later?”

Ignites / October 14, 2020

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Alan Johnson, managing director of New York-based compensation consultant Johnson Associates Inc., said that Wells Fargo’s announced cost-cutting plan will hurt the firm from a recruitment perspective, including in asset management.

“It’s not just the cost cutting, but years of instability at the bank,” since the 2016 sales scandal surfaced, he said. “It’s just one negative story after another. … (There’s) just a general malaise from bad news and instability,” Mr. Johnson added, noting that it could negatively impact Wells’ ability to attract new asset management clients.

Pensions & Investments / September 2, 2020

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Equities traders at major U.S. banks largely succeeded in navigating the most tumultuous markets in a generation as the pandemic triggered lockdowns in March and sent stocks swooning, only to later rebound. But that performance was soon overshadowed by fixed-income trading. Federal Reserve intervention in credit markets helped banks arrange a slew of fundraisings for desperate companies, giving those traders ample chances to buy and sell newly issued bonds.

In the second quarter, traders at three top fixed-income trading houses — JPMorgan Chase & Co., Citigroup Inc. and Goldman Sachs Group Inc. — generated about $10 billion in additional revenue. The windfall helped keep JPMorgan and Citigroup profitable despite massive loan-loss provisions.

Fixed-income traders may see their year-end bonuses jump 25% to 30%, according to Alan Johnson, founder of compensation consultant Johnson Associates. Yet those traders are likely to expect increases of 50% or more, he said.

“They’re going to be paid somewhat less than their results on an isolated basis,” Johnson said. “They will be disgruntled.”

Bloomberg / August 12, 2020

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CNBC Squawkbox / August 10, 2020

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“You’ll hear about some multimillion-dollar trader that got some multimillion-dollar increase in pay while you got less pay,” Alan Johnson, president and founder of Johnson Associates, said in an interview. “You’re not going to be able to make everybody happy and, unfortunately, this year you’re going to make many people unhappy. There are limited funds in a terrible environment.”

Along with the bonus disappointments, Wall Street should also brace for job cuts of as much as 10%, Johnson said.

“They’re figuring out they don’t need as many people as they did even in February,” he said. “The pandemic makes this so much worse from a personal, societal standpoint. So there’s a hesitancy to do this quickly.” He expects the cuts to come in the fourth quarter and the start of 2021.

Bloomberg / August 10, 2020

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The largest private equity funds have enormous amounts of cash to invest, but face portfolio company defaults. Alan Johnson, head of the compensation and consulting firm, said PE outfits benefit from leverage when markets are up. “Now they’re on the other side of leverage and it hurts,” Johnson told Institutional Investor.

“I won’t have a charity benefit for these people. They’re down 10 percent from the top of the mountain,” he pointed out…

“We have been pleasantly surprised at how companies can run efficiently and remotely. But asset managers have found they can operate with fewer people,” said Johnson. “We’re seeing that asset management and the U.S. economy can run a lot more efficiently. Working remotely exposed things like our long commutes. New York City hasn’t changed since the 1950s when it comes to commutes. Now we know we don’t need that. But then it also shows you don’t need as many people as well.”

Johnson expects many of the layoffs to disproportionately affect people of color. That’s because lost jobs will be in areas like operations and technology, many of which are held by Black and Hispanic professionals.

Institutional Investor / August 10, 2020

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“It is going to be a disappointing year,” says Alan Johnson, managing principal at compensation consulting firm Johnson Associates. And lower comp isn’t the concern for industry workers.

“Headcount is going to be a big issue in the industry,” Johnson adds.

Effective remote work not only came as a surprise to asset manager business leaders, but it has also led them to rethink their firms’ operating models and staffing levels, Johnson adds.

“This working-from-home thing has worked out better than anybody ever thought,” he says. “I think they are wondering, do they need as many people they thought they needed in February? And a lot of asset management firms are going to decide ‘no, I don’t need as many people as I thought I did.’”

FundFire / August 10, 2020

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Managing director Alan Johnson said employees on the support and operations side of the business, like those involved in processing and lower-level technology functions, will likely be most vulnerable.

The dim projections underscore how asset managers are under pressure as they navigate falling fees for products and thinning profit margins in a highly uncertain economic environment the coronavirus pandemic has brought on.

“This is going to be a very difficult end of the year,” Alan Johnson, the firm’s managing director, said in a phone interview.

Investors shifting out of stocks and flocking to lower-risk, lower-fee products like bonds during the volatility this year has had another negative impact on revenue, he said.

Business Insider / August 10, 2020

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“It’s not just where the markets are, it’s the fees you collect,” said Alan Johnson, managing director of Johnson Associates, in a phone interview. “We have these systemic changes within the market. We’ve moved from active to passive; we’ve moved to ETFs.”

Mr. Johnson added that the decline is only “moderately worse” than estimates made earlier in the year because of the systemic changes. “We thought it would be down this year, anyway, so this is much better than anyone thought it would be,” he said.

“There’s going to be a fair amount of job insecurity,” Mr. Johnson said. “Firms found that they don’t need as many people as they thought they did. And adding the tragedies and stresses of the pandemic, it’s going to be a very difficult year-end.”

Pensions & Investments / August 10, 2020

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Only traders and investment bankers who work in underwriting are likely to receive bigger bonuses in 2020, compared with 2019, according to the report…

Layoffs could begin at traditional asset management firms and investment and commercial banking divisions later this year or in early 2021, as banks struggle to make a profit as the pandemic suppressed client activity and threatens to cause loan defaults.

Alan Johnson, author of the report, has said that layoffs this year could be significant. Companies were forced to make quick decisions and cut red tape during the pandemic, and they have recognized fewer employees are needed to do certain jobs, Johnson said.

Reuters / August 10, 2020

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On Wednesday, it was reported by a top compensation consulting firm, Johnson Associates, that Wall Street is likely to cut bonuses this year by 15 to 20%. These numbers were revised downward from a dire 30 to 40% reduction made earlier in the year. At that time, Alan Johnson’s views were pretty bleak, calling for 2020 bonuses to decline by as much as 40%, as the coronavirus outbreak hit markets hard and put millions of people out of work.

He considers the tough climate and predicts Wall Street firms will likely cut pay for almost everyone to save cash. Johnson figures “subpar” employees will see bonuses drop over 50% and possibly be fired. Johnson said, “Now is the time to get rid of the people you probably should have gotten rid of before.” He added, “The industry has been carrying some extra weight for a while.”

Johnson pointed out, “Technology has shown us that we don’t need as many people, don’t need as many management levels…and in many places there is going to be job insecurity.” He also believes that incentive compensation will be closely monitored, in light of the current social and political climate inspired—in part—by the Black Lives Matter movement. This enhanced scrutiny will extend to chief executives’ compensation at public companies, Johnson wrote.

“With the impact of COVID-19 and recent focus on justice and equality, it will require a thoughtful analysis and balance of performance, competitive and societal priorities, and customer and employee expectations,” Johnson wrote. “This is not a year to be tone deaf.”

Forbes / June 24, 2020

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Most employees who receive H-1B visas are hired to fill roles at asset managers that require technology skills, says Alan Johnson, managing director at Johnson Associates. BlackRock and Fidelity were each recruiting for tech jobs last year. Large firms with sophisticated recruitment teams are generally more likely to use the visa program, Johnson adds.

“The first thing firms are going to think about is: ‘Do we have an office around the world where we can put these people,’” he says. For example, companies can relocate positions they’d intended to be based in the U.S. to overseas offices.

Another option might be asking candidates to start their new jobs in January, Johnson says. The suspension of the visa program is set to end Dec. 31. And the presidential election could result in a change of the government’s immigration policies.

And the third option, he says, would be to fill those roles with U.S. citizens, Johnson says. However, he adds, that could be easier said than done.

Fund Fire / June 24, 2020

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The latest survey by compensation consultant Johnson Associates predicts that financial services pay will be slashed by 15 percent to 20 percent in 2020 — a vast improvement from the 30 percent cuts the same survey predicted in mid-May.

“We’ve dug halfway out of the hole,” the report’s author, Alan Johnson, told The Post. “But that said, after a pandemic and the social unrest, it’s going to be an emotion-filled end of the year.”

Adding to the year-end drama, Johnson said, will be an uptick in pink slips, as Wall Street looks to cut costs in the aftermath of the pandemic, which is expected to lead to a decline in business for retail and investment bankers thanks to rising loan defaults and a frozen M&A landscape.

Johnson’s report also predicts that the Black Lives Matter movement could have real impact on year-end pay considerations, with executive compensation and pay ratios being looked at through a new diversity lens as financial firms reckon with racial inequities within their own walls.

“This is not a year to be tone deaf,” Johnson said.

New York Post / June 23, 2020

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Incentive compensation will be under strict scrutiny this year and will take into account companies’ performance during the coronavirus crisis and the Black Lives Matter movement.

This scrutiny will extend to chief executives’ compensation at public companies, Johnson wrote.

“With the impact of COVID-19 and recent focus on justice and equality, it will require a thoughtful analysis and balance of performance, competitive and societal priorities, and customer and employee expectations,” Johnson wrote. “This is not a year to be tone deaf.”

Reuters / June 23, 2020

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Alan Johnson, managing director of New York-based compensation consultant Johnson Associates Inc., said increased CEO pay [for 2019] was “pretty rational” given the performance of firms last year.

Year-end pay for 2020, however, is “likely to be down significantly,” with senior executives apt to see pay decreases “at least as bad as everybody else,” Mr. Johnson said.

The fact that 2020 is also a presidential election year could have an impact on year-end pay for chief executives, or at minimum scrutiny surrounding these disclosures, Mr. Johnson said.

…Amid the economic downturn caused by the coronavirus, Walt Disney Co. Chairman Robert Iger is one of several executives who will forgo his salary, while Disney CEO Bob Chapek will have his salary cut in half, Bloomberg reported on March 30.

Moves such as this may conflict with the status quo in the asset management industry, however, to project stability in turbulent times to investor clients. According to Mr. Johnson, the message for many money managers to their customers and employees is, “We are here. We are strong.”

Pensions & Investments / May 18, 2020

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Bonuses for both equity and fixed-income traders could jump as much as 20% this year, according to compensation consultant Alan Johnson, the managing director of Johnson Associates Inc.

“This is their heyday” after several years of virtually no change in compensation, Johnson said Wednesday in an interview. “Sales and trading now is mainly a customer business, so you’re benefiting from the flows.”

While some traders are looking forward to a pay windfall at the end of the year, the outlook for the rest of the industry isn’t so rosy. Bonuses for merger advisers could tumble 25% or more, and payouts for underwriting work could drop 15%, according to Johnson.

Bonuses could fall 30% in retail and commercial banking as a surge in provisions for losses outweighs loan origination and deposit growth, he said, adding that the pay forecasts might be too optimistic depending on how the easing of lockdown restrictions plays out.

“If this opening up turns out to be a real problem, and then we have further shutdowns,” Johnson said, “then things could get a lot worse.”

Bloomberg News / May 13, 2020

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It’s going to be an ugly bonus season on Wall Street…

“It’s going to be a second kick,” the report’s author, Alan Johnson, told The Post. “You had a hellish year and your pay is going to be down.”

The pain will not be felt equally on Wall Street, Johnson adds.

“There’s going to be a wide disparity between the people who got it right and the people who got it wrong,” Johnson warns.

New York Post / May 13, 2020

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Wall Street bonuses for 2020 could fall by as much as 25%-30% due to the deep cuts to revenues recorded by banks and hedge funds earlier this year as a result of the novel coronavirus, according to a report published Wednesday by compensation consulting firm Johnson Associates Inc.

While most compensation is expected to be down, 2020 is likely to be a year with “wide, wide variations in incentive outcomes between stronger and weaker competitors,” according to the report by Alan Johnson, whose predictions are closely watched by financial professionals.

For Wall Street professionals, most of whom are working from home, bonuses make up a significant percentage of their annual pay, and many have been fearing big cuts.

The New York Times / May 13, 2020

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Money management professionals can expect to see a 20% to 25% decrease in year-end bonus payouts from last year, said projections from compensation consultant Johnson Associates.

Johnson Associates’ quarterly analysis projects broad and substantial decreases in incentive compensation across financial services. Incentive compensation for asset management is expected to be down broadly, with the coronavirus pandemic magnifying the ongoing challenges of many firms. Fees are down and revenues are declining as a result of the pandemic.

Pensions & Investments / May 13, 2020

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The rest of this year is likely to bring “a greater dispersion” than ever before in pay and performance for hedge fund professionals, says Alan Johnson, managing director at compensation consultancy Johnson Associates. Many clients are already modeling lower pay levels, he adds.

“The average hedge fund pay incentives will be down 15% to 20%,” he says. “This will be noticeably down. But again, there will be a handful of winners.”

Hedge funds are unlikely to implement pay cuts now because they want to send a message that they are stable and secure, and because base salaries usually make up a small part of pay compared to year-end bonuses, Johnson says. Additionally, most firms are facing the “the double impact” of an already stressful business environment as well as the current Covid-19 situation, he says.

“It’s going to be a real balancing act for morale… It’s going to be really tricky this year,” Johnson says. “Giving a hug does not come naturally for most of these firms.”

There is likely to be greater movement across hedge funds this year to compensation models driven by profits and losses, as opposed to other factors such as recruitment or business development, Johnson says.

“There is a movement toward more objectivity and formula,” he says.

Some firms are also discussing if they need to have offices scattered across the globe if they have only a handful of employees in those locations, he adds.

“It’s going to be a year-end like no other for hedge funds,” Johnson says.

FundFire / April 29, 2020

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Private equity industry pay could drop by 15% this year, says Alan Johnson, a compensation consultant and founder of Johnson Associates. The most dramatic shift will be in carried interest, which has “evaporated” in the wake of the economic downturn, he added.

Johnson says there is a silver lining in that private equity owners and managers will be pushed harder to extract more performance from the businesses they own.

Older executives, who have been in the industry for decades and have been through previous downturns, will have seen pay rise and fall in the past. For the younger and mid-level employees, the drop in pay will be a bigger shock, he adds.

Financial News / April 27, 2020

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Across the industry, asset management professionals’ bonuses fell 3% in 2019, compared with 2018, according to compensation consulting firm Johnson Associates. It projects that asset management professionals will end 2020 with even more severe decreases in bonus packages at the end of this year.

The Wall Street Journal / April 9, 2020

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But layoffs, “from moderate to severe,” will eventually occur at money management firms as a result of the market downturn and the “severe recession” that is expected to follow the pandemic, said Alan Johnson, managing director of New York-based compensation consultant Johnson Associates Inc.

Despite this, he has advised money management clients to not panic and “do sensible things” regarding decisions about their workforces.

“I know there will be stories of bad HR practices, and if you’re a business, you don’t want that headline,” Mr. Johnson said. In addition to negatively impacting company morale, sudden decisions about layoffs amid the pandemic may also carry legal implications, particularly if employees become or are sick, he added.

Pensions & Investments / April 3, 2020

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“The virus is heading us toward a nasty recession,” said Alan Johnson, managing director of Johnson Associates in New York. His firm predicted banks, brokers and asset managers would slash bonuses this year, following a mixed performance in 2019, when private-equity firms held bonuses level or raised them as much as 5% over 2018.

The Wall Street Journal / March 26, 2020

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Wall Street bonuses will fall roughly 30% this year, with even the most productive employees facing a pinch, as big banks and investment managers try to preserve profits during the coronavirus recession, a leading compensation expert said on Wednesday.

The predictions by Alan Johnson are closely watched by financial professionals, especially during times of stress. The global coronavirus outbreak has already hit markets hard as politicians have ordered huge swaths of the population to stay home and non-essential businesses to close, putting millions of people out of work…

“Now is the time to get rid of the people you probably should have gotten rid of before,” Johnson said in an interview. “The industry has been carrying some extra weight for a while.”

Reuters / March 25, 2020

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A “perfect storm” is taking shape, with a global recession looming and broader industry shake-ups coming as well, the managing director of Johnson Associates Inc. said.

“It looks like it’s going to be a very, very tough compensation year,” he said in an interview Wednesday. “This is a shock to the system that you see about every 10 years.”

…“The one silver lining is it’s going to change attitudes about working from home, which truthfully in financial services is long overdue,” he said.

Bloomberg News / March 25, 2020

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“We’re not having a flush year” as an industry, said Alan Johnson, managing director of Johnson Associates…

When it comes to real estate, Johnson noted the 2017 federal tax overhaul’s impact. He said the capping of state and local tax deductions has made living and working in New York City more expensive for many companies and individuals. Though the changes were first felt in 2018, Johnson said the fallout is only beginning now.

“It usually takes people two to three years to get their heads around [tax changes],” he said. He said several clients are looking at quietly relocating employees to Florida, Texas or Utah.

“New York is just very, very expensive,” he said. When it comes to wealthy financiers buying apartments, “why buy it here if you can buy it in Miami?” he asked.

Johnson did note, however, that there’s a bright spot for bankers compensated in equity in recent years. With bank stocks up, they could have “more money in their pocket than they thought.”

The Real Deal / February 14, 2020

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The situation has swept up executives who haven’t been accused of any misconduct, according to the people, who asked not to be named discussing the confidential process. For denizens of the financial industry, it offers a cautionary tale about what can happen now that banks are diverting billions of dollars annually into stock awards to be doled out in the future…

“That’s the fear: You’re going to be at the wrong place at the wrong time — you didn’t do anything bad but you’re going to be judged in a politically, potentially arbitrary way,” said Alan Johnson, managing director of compensation consultant Johnson Associates. “It’s like nuclear fallout. The bomb didn’t drop on you but you were within five miles of it.”

Highly paid executives at banks typically received as as little as 30% of their earnings in the form of long-term compensation before the financial crisis — a portion that’s grown to 50% to 60% today, according to Johnson Associates. Wells Fargo’s top five earners received 72% of their pay in long-term awards by 2018, according to its most recent annual proxy statement.

Bloomberg News / February 6, 2020

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Managers are currently “loath to add in fixed costs, and I don’t see that changing,” said Alan Johnson, managing director of Johnson Associates Inc., New York. And given industry headwinds such as fee pressures, he doesn’t believe managers would try to make up for a dearth of big bonuses by increasing salaries or other entitlements for staff.

“As the industry continues (in this direction), it will make some people uncomfortable because pay isn’t as predictable as it once was,” he said.

Since 2015, year-end incentives for asset management professionals in traditional equities and fixed income have wavered, drifting down in 2016, then increasing in 2017 and 2018. Johnson Associates predicts year-end bonuses for 2019 will be flat to down 5%.

In comparison, 2019 bonuses for private equity and hedge fund professionals are expected to be flat to up 5% over last year, Johnson Associates predicts…

Recruiters had mixed thoughts on the effect that technology may have on pay.

Chris Connors, an associate at Johnson Associates, said in an email that the advent of new technologies for money managers will have a “neutral” impact on professionals in investment and sales.

“Assuming they have the analytical skills that are required going forward, (they) should not be heavily impacted,” he wrote.

For professionals in support roles, however, “we believe there will be a negative impact on pay due to technology. There will be more people than jobs available and technology will likely reduce their impact going forward,” Mr. Connors wrote.

Pensions & Investments / January 27, 2020

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Most Wall Street banks announced their fourth quarter profits beat industry expectations last week. But by the end of this week, bank sources and compensation experts told Reuters, most of their staff will be underwhelmed by their bonuses…

“Markets can go up, earnings can go up, but that doesn’t mean pay has to go up,” said Alan Johnson, who advises financial firms on pay. He expects bonuses to be flat at best for most Wall Street workers.

The New York Times / January 22, 2020

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As money managers continue to evolve to better integrate technology into their business, demand for professionals with this expertise also grows.

And while firms are moving to lower-fee investment products and facing increased operational costs, the “best technologists and data analytics (professionals) continue to be expensive,” said Alan Johnson, managing director of Johnson Associates Inc., New York.

Despite this, moving into 2020, pay for asset management staff, on average, is expected to look similar to 2019, “down slightly,” according to Mr. Johnson.

Year-end incentives, which include cash bonuses and equity awards, for asset management professionals were projected to be flat to down 5% compared to year-end 2018, a November report by Johnson Associates said.

“I think (compensation declines) probably would be worse, but firms continue to look at their headcount to make sure they don’t have too many people,” Mr. Johnson said of pay projections heading into 2020.

Pensions & Investments / January 13, 2020

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“There may be people working New Year’s because they’ve got to finalize this January 10 or 15,” said compensation consultant Alan Johnson. “People are going to be particularly vigilant to make sure that they’re going to be paying the right amount, figuring it out right up to the end of the year.” At one bank last year, trading heads were told in late-December that millions of dollars needed to be shifted from their bonus pool to other divisions, a source familiar with the matter told Reuters on the condition that the bank and person not be named. The industry is trying to avoid situations like that again this year, Johnson said.

Johnson’s firm publishes a closely watched annual report forecasting where Wall Street bonuses are headed. It found that most employees will likely see a decline from last year, especially in equities trading where bonuses could fall 10-15%. Investment bankers can generally expect to see declines of 5-10%, Johnson Associates predicted.

Reuters / December 10, 2019

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“Pay is down in a healthy market—that just tells you how much competition there really is,” Alan Johnson, managing director of Johnson Associates, said in an interview. “We’re clearly in the new normal.”

Banks have faced muted capital markets results in recent quarters amid uncertainty around geopolitics and interest rates. The industry’s healthy third quarter is unlikely to counteract the worst first half in a decade for Wall Street’s trading desks, particularly because the last three months of the year tend to be weak, Johnson said.

Crain’s New York Business / November 12, 2019

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Executives at traditional asset management firms can expect to see their 2019 year-end bonuses either remain flat or decline by 5% from the previous year, according to a report from compensation consultant Johnson Associates.

Johnson Associates’ third-quarter report added that professionals within the hedge fund and private equity industries, meanwhile, are projected to see an increase as much as 5% in their year-end payouts…

Mr. Johnson added that he expects “selective layoffs and less hiring to continue as firms buckle down on expense management,” which will contribute to “a downward impact on compensation in 2020.”

Pensions & Investments / November 12, 2019

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“All signs are pointing to an overall disappointing and lackluster year on Wall Street,” said Alan Johnson, managing director of the firm that did the report…

Payments are pressured by a number of factors, including increased competition among investment banks, declines in equity trading and underwriting activity this year, and overall higher expenses, in part from technology investments and hiring.

“All the big banks are well run and solidly profitable, but the investment banking businesses continue to face extreme competition,” Johnson said.

Reuters / November 12, 2019

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It used to be a straight shot from what the markets did to Wall Street and asset management paychecks. This is the first year those two have diverged significantly, according to Johnson Associates’ yearly analysis of incentive compensation…

“If you look from January 1st, the markets look terrific,” said Alan Johnson, the founder and managing director of the compensation and consulting firm, in an interview. “So lower comp will be surprising to the industry. They’ll say, ‘Hey, it’s been a great year!’ But, no, not really. It depends on the time frame. if you include the fourth quarter [of 2018], it doesn’t look so good,” he added.

Johnson said the industry is decoupling from traditional measures of success anyway, such as assets under management. 

Institutional Investor / November 12, 2019

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Alan Johnson, managing director of New York-based Johnson Associates, said pursuing clawbacks—which he dubbed the “nuclear weapon” of pay disputes—requires careful consideration.

“If you get into these personal, behavioral issues it just gets really tricky,” Johnson said. While embarrassing episodes such as an extramarital affair, DUI, or personal bankruptcy might raise red flags, Johnson said boards must take into account “honest mistakes.”
Otherwise, companies run the risk of stifling meaningful communication with draconian responses.

“If you make the punishment so severe and so dramatic, are you going to get actual less reporting of the things that you’re trying to stop?” Johnson said, adding, “If everything is the death penalty, then perhaps the problem grows exponentially.”

Cluttering up contracts with an endless laundry list of possible infractions would probably be counterproductive, Johnson warned. Still, he sees the value in having shareholders voice their wishes via environmental, social, and corporate governance initiatives.

“I think this commentary and criticism is helpful,” he said.

Bloomberg Law / November 6, 2019

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But Alan Johnson, managing director at Johnson Associates, a New York-based compensation-consulting firm, says he’s “leery” of including a salary range in job postings. He’s more open to the idea of companies publishing a data point—like a minimum salary—instead of a range because it’s all about managing expectations.

“If you hire someone but their salary is not at the top of the range,” he says, “then they are going to be disappointed, and that’s not a great place to start working.”

The comp-range approach could also prove beneficial for some companies, Johnson adds.

“If the range for a job is $60,000 to $90,000,” he says, “there may be a few people who would have been turned off at 60k, but you might get a few more candidates at 90k. You may get a few more people into the funnel because they are turned on by the top part of the range.”

Johnson says he expects to see more companies adopting the comp-range approach in the coming years.

“I think, with all the work on income equality and diversity, it’s going to increase in usage,” he says. “The perception is that adding comp ranges will help us treat groups more fairly. Whether that’s a good idea or not, we can debate. But it’s certainly a trend that’s going to increase.”

Human Resource Executive / September 24, 2019

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Alan Johnson, CEO at compensation consultancy Johnson Associates, believes it’s clear that Argo’s corporate governance changes are the direct result of a proxy contest led by Voce Capital…

Shareholders’ concerns over Argo’s pay design were likely due to the fact that its LTIP plan was an outlier. Indeed, Johnson is surprised that Argo didn’t already have a three-year period in place for measuring its long-term metrics.

“That’s pretty standard,” he says. “Their performance goals weren’t hard enough in their long term.”
While Johnson acknowledges it isn’t common for companies to announce corporate governance changes this early on prior to their next fiscal year, in this case, he says, “it’s certainly reasonable,” since Argo might want to avoid another proxy fight in 2020 or signal to shareholders “we are responsible.”
Johnson says these are two small measures from Argo to shareholders to show “we listened, we heard you.” However, he warns that shareholders shouldn’t ignore the other concerns Voce voiced in its proxy fight, because he says, “I can’t imagine in the proxy fight, they were talking to investors and these were the only two things they were told to do.”

Agenda Week / September 12, 2019

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For institutional investors and consultants assessing the health of money managers, there isn’t necessarily a direct relationship between desired headcount levels and AUM at firms, “especially in today’s market where revenue plays a larger role given the wide range of fee structures for different products,” Francine McKenzie, managing director at compensation consultant Johnson Associates Inc., New York, said in emailed comments.

“I would think AUM might be one factor, but in conjunction with the kind (complexity, associated risk factors, etc.) and number of products,” as some require more staff than others to manage, she added.

Still, a significant drop in AUM and headcount “could signal instability to investors which is obviously undesirable, especially if coupled with poor investment returns,” Ms. McKenzie wrote.

Pensions & Investments / September 2, 2019

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…there is a peculiar dynamic, where pay can fall even when the economy is strong, said Alan Johnson…

“This is some kind of an inflection point,” he said. “It used to be, ‘As long as AUM is up and as long as the market is up, you’ll be fine.’ But that’s no longer true.”

Although fewer are bringing home massive paychecks, Wall Street still rewards top performers, Johnson said. Those who create products, maintain strong ties with clients and outsmart rivals are particularly valuable… “There’s a huge focus on paying the very best people.”

Reuters / August 6, 2019

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Compensation for many employees of big banks and asset managers is expected to stay flat or drop this year…

Equities trading and underwriting will probably be hardest hit, according to a new report by the compensation consultancy Johnson Associates. Their annual pay packages could fall by as much as 15 percent from last year.

The New York Times / August 6, 2019

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Traders and investment bankers “haven’t had the revenues that I think they were expecting,” Alan Johnson, managing director of Johnson Associates, said in an interview. “Clients haven’t come back, the volumes haven’t come back.”

“The economy is clearly slowing, so how fast is that going to happen I think is the big variable,” Johnson said. “Is it going to slow at a nice, even pace or are we going to have a more dramatic decline?”

Bloomberg / August 6, 2019

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Asset gains will not push incentive compensation up due to the shift in assets to lower-fee products and the rebalance out of equities into fixed income strategies, the compensation consulting firm states in its second-quarter trends and year-end projections report released today.

Revenues have replaced market gains and assets under management as predictors of incentive compensation, according to Johnson Associates.

“We always looked at simple gauges in the industry: If the market was up 15%, that would be a very attractive pay year,” Johnson says. “[Now], AUM doesn’t mean what it used to. We now realize that a dollar of AUM is not the same as another dollar.”

Fund Fire / August 6, 2019

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A recent wave of layoffs from some of the biggest banks is making it harder than ever to get a job on Wall Street, recruiters and other insiders say…

“It’s a tough time if you’re an average performer,” Alan Johnson, CEO of Johnson Associates, told The Post. “If you’re good or very good, it’s not a bad time.”

The most in-demand types of jobs, Johnson said, are in technology and operations, and banks are continuing to hire aggressively in those positions.

“It’s surprising,” Johnson said. “The markets and the real economy can be up and Wall Street can be down. The real question is, when the markets and real economy are down, then what happens to Wall Street?”

New York Post / August 5, 2019

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Mergers and acquisitions are prompting asset managers to reevaluate compensation — a process that can cause key personnel to flee if new pay plans don’t live up to their expectations.

Typically when asset management firms merge, they try to combine their compensation structures, says Alan Johnson, managing director at Johnson Associates, a compensation consultancy.

“If you’ve got enough time to work on it, you try to say, ‘let’s try to get the best of each one of them so they may not simply be choosing one or the other [but] … the best pieces of each one of the two firms.’”

Fund Fire / July 1, 2019

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Alan Johnson, CEO of compensation consultancy Johnson Associates, finds Facebook, and particularly Zuckerberg, to be brazen in undertaking personal expenditures that are a cost to the company.

“Facebook, of course, they don’t care what anybody thinks,” he says.

Johnson is also skeptical about the aircraft perk as a security issue.

“He could reimburse the company, and he wouldn’t show up on the list; he doesn’t care about showing up on the list,” Johnson says.

He also notes that the optics don’t quite line up. Zuckerberg’s facing such severe security threats that the company covers the cost of guarding against them gives rise to questions about his personal life. Reports earlier this month show that Zuckerberg just added a $59 million estate in Lake Tahoe to his personal real estate portfolio, as The Wall Street Journal reports.

Add to that the fact that Zuckerberg’s aircraft perks nearly tripled from the disclosed $872,000 in 2016, and “it makes you shake your head like, ‘how much time are these people really working?’” Johnson says.

Johnson notes that the top-spending execs are outliers, and he acknowledges that “airplane perks at a moderate level are OK.”

“Airplane perks continue to be under pressure. It’s a wonderful perk for executives, but shareholders don’t like it,” Johnson says. Johnson explains that it depends on what kind of agreements the company has in place. If it’s an aircraft they own, “you’re not going to stop using it,” he says. But if it’s time for a new plan or a lease is up for renewal, companies are asking, “Is this something we need to do anymore?”

AgendaWeek / May 24, 2019

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Following the first quarter, alternatives compensation is projected to remain flat or see some modest increases, according to a report from Johnson Associates. While hedge fund performance has ticked back up after a tough 2018, high watermark challenges around performance fees remain, and that could lead to a disconnect between people’s expectations and their paychecks, says Alan Johnson, managing director of Johnson Associates.

“They’ve had a rough four to five year period,” he says of the hedge fund space. “In pay, we are seeing flat to maybe up a little bit.”

“If you’re the right quant in the right spot, you can make over a million,” Johnson says. “It’s not a shocking number anymore.”

More shocking in a way, Johnson says, are early career technologists who can command over $200,000. “Firms are really, really willing to pay for the right talent. It’s not so much seniority anymore,” he says.

Fund Fire / May 22, 2019

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Asset managers’ incentive compensation are shaping up to remain flat in 2019. This news is sure to be met with disappointment, but Alan Johnson, managing director at compensation consultancy Johnson Associates, says that things could have been a lot worse.

At the turn of the year the first quarter incentive compensation scenario looked a lot more somber, but the market rebound improved the forecast, Johnson says.

“We were thinking that compensation would be down in the asset management business for 2019. So, the very nice market uptick in the last four, five months changed it the outlook of being negative to flat,” he says.

Still, flat incentive compensation packages can be hard to swallow.

“The challenge is to manage people’s expectations because, the results kind of made a ‘V,’ they went down in the fourth quarter, they are up in the first quarter, but it gets us back to break even,” Johnson says. “Your pay is not going to be up if the industry is kind of flattish from here to the end of the year.”

Fund Fire / May 9, 2019

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Alan Johnson, managing director at the consultancy, said: “An emerging trend worth noting is the clear movement of incentive plan designs towards business/unit objectives with less focus on global/overall firm results.

“With the advantage of hindsight, plans had over-emphasized an ‘all for one’ philosophy, which can be less effective in more challenging environments.”

Financial News / May 8, 2019

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CEOs of the country’s largest asset managers, and megabanks with asset management divisions, are finding themselves in the hot seat over their high earnings relative to those of their employees.

The first wave of CEO pay ratio disclosures began last year, drawing scrutiny from Congress as the industry marked a decade since the 2008 financial crisis. Meanwhile, a Pensions & Investments analysis of proxy filings for 11 firms found that top executives received a mix bag as far as raises vs. pay cuts last year.

Overall, five CEOs saw their total compensation drop, while six received a bump in pay over 2017…

Alan Johnson, managing director and president of compensation specialist Johnson Associates Inc., New York, said he expects CEO pay to vary, with slightly more firms raising pay in 2018, despite the down fourth quarter. Asset managers will look at financial and investment results, as well as the company’s ability to attract new assets when assessing compensation, however, he added.

Pensions & Investments / April 29, 2019

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Asset-management professionals will end 2019 with flat growth in bonus packages over 2018, according to a projection by compensation consultant Johnson Associates. Last year, asset-management professionals ended with bonus packages 3% to 4% higher than the previous year.

Wall Street Journal / April 12, 2019

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“We don’t have the extreme levels of pay we saw 10 years ago,” said Alan Johnson, a Wall Street pay consultant. “The people making $10 million or $20 million a year aren’t there anymore.”

Wall Street pay may be about to soar even higher as the Trump administration takes an ax to some Obama-era regulations. The Volcker Rule was weakened last year, giving banks more leeway on trading, and the Consumer Financial Protection Bureau has been effectively neutered. More changes may be on the way.

“I would say we had 150% more regulation than optimal during Obama,” Johnson said. “Now we’re at 125%.”

Crain’s NY / April 2, 2019

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Unless active managers can differentiate themselves and their investment strategies, “like any industry that sells a lot of generic products, the active side of the industry will inevitably be smaller,” said Alan Johnson, managing director and president of compensation specialist Johnson Associates Inc., New York.

Pensions & Investments / April 1, 2019

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“The investment industry is behind the times and resisting change,” said Alan Johnson, managing director and president of Johnson Associates Inc., New York, a money manager compensation consultant.

Mr. Johnson said the current “belt-tightening” the industry is undergoing will inevitably reduce the total headcount as managers rationalize and retrench their businesses by shedding “half-hearted” investment strategies, rethinking earlier geographic expansions and renewing their focus on better aligning compensation and incentives.

The result of cost-cutting measures likely will result in an overall 5% decline in money management compensation in 2019, according to Johnson Associates’ estimate.

Pensions & Investments / April 1, 2019

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Alan Johnson, founder of compensation consultancy Johnson Associates, calls Sloan’s announced departure “kind of inevitable.”

He says it is likely the board has been seeking replacements in recent months, and hopefully isn’t reacting only to Sloan’s testimony before Congress several weeks ago.

Johnson believes the most logical successor for Sloan will be an executive at a large bank with experience in the industry but who is perhaps a No. 5 or No. 6 in line elsewhere and likely not in line to become CEO at their current place of employment.

“They’re probably going to be compensated a lot,” Johnson adds, noting that it will likely be “at least” what Sloan was paid, since the incoming CEO of Wells Fargo will need “credibility” and “tough skin.” They will also likely be leaving a hefty amount of compensation behind.

He notes that an external search was the right decision for Wells Fargo. “You want to bring in someone who can legitimately say, ‘Hey, I just showed up.’”

Agenda / March 28, 2019

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Wall Street’s average bonus fell 17 percent in 2018 to $153,700, the first decline in three years, according to estimates by New York State Comptroller Thomas DiNapoli…

While DiNapoli didn’t break out bonuses by business lines, equities traders probably fared best, based on forecasts in November by pay consultant Johnson Associates Inc. Fixed-income traders and merger advisers were probably among the list of losers for 2018, according to the estimates…

Bad news on pay may continue this year. Compensation including bonuses and salaries for 2019 is likely to fall as pressure to lower fees and volatile markets weigh on firms’ revenue, Johnson Associates said last month.

Bloomberg / March 26, 2019

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[Alan] Johnson says companies get into problems when their culture is based on letting different kinds of infractions like cheating, misreporting, and harassment slide “as long as the money is coming in.”

Another way to curb misreporting is to make sure early on that people have the right skills and the capacity to succeed in their role, he notes. Moving people to more appropriate jobs or even out of the company will reduce desperate, emotion-based reporting decisions that could hurt the company’s bottom line.

There is also the argument that removing incentives entirely means that, as Johnson puts it, “no one will cheat but then no one will care, either.”

Human Resource Executive / March 6, 2019

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When last proposed in 2016, the rules would have required the biggest financial firms to defer payment of at least half of executives’ bonuses for four years, a year longer than common industry practice. It also would have established a seven-year clawback period, in which executives would be required to return their bonuses if their actions hurt the institution or if a firm had to restate financial results….

Alan Johnson, a consultant who helps banks design their pay plans, said much of what regulators had hoped to accomplish with the pay rules is already a reality. Today’s bankers and traders are paid less than a decade ago, and banks have curbed the riskiest kind of trading and lending that drove losses during the meltdown.

“I think the regulators are going to refight a war they’ve already won,” Mr. Johnson said.

The Wall Street Journal / March 5, 2019

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Wall Street is likely to see moderately lower compensation in 2019 as fee levels and volatile markets weigh on bankers’ bonuses, pay consultant Johnson Associates Inc. said…

Banks also face “continued angst about competition for high-end technology talent,” the firm said, warning that the companies are looking to downsize as some workers are replaced by automation technologies.

Bloomberg / February 27, 2019

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With volatility hurting returns, some traditional firms acting to address concerns over spending.

Most traditional managers saw their assets under management decline during the fourth quarter, a Pensions & Investments analysis of 24 publicly held money managers found…

Asset managers want to be “leaner and have faster decision-making, which means you can’t have too many people near the middle or top” of the organization, said Alan Johnson, managing director of compensation consulting firm Johnson Associates Inc., New York.

Mr. Johnson said recent cuts were “about what I expected, which is moderate adjustments to headcount.”

Pensions & Investments / February 18, 2019

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US investment banks have been eating away at European businesses’ market share on their home turf since the financial crisis. In a bumper year for mergers and acquisitions fees in Europe, US investment banks had a 54.2% slice of the pie in 2018, according to data provider Dealogic, with European banks taking 41.4%. This is widest gap since the turn of the century.

“European investment banks lag their US rivals in both performance and pay, and the difference is getting larger,” said Alan Johnson, founder and chief executive of Johnson Associates, a remuneration consultancy.

Financial News / February 4, 2019

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“For the last 20 years, it’s been a great business — probably too great,” said Alan Johnson, managing director, compensation consultant at Johnson Associates Inc., New York. “The shifts to lower fees mean asset managers have had to find other ways to maintain margin. … Earnings are likely to be down, with layoffs in the first or second quarter — and those will be technology-driven.”

Pensions & Investments / January 2, 2019

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Compensation will be strongest at firms that have the scale to maintain strong profits or the technology platforms to keep costs low, including managers that focus on passive products and exchange-traded funds.

Despite industry pressures, overall headcount increased in 2018 for both public and private managers, specifically in technology, product development and international markets. But this trend likely won’t last.

Next year, things are looking worse, with planned job cuts coming as soon as the first quarter of 2019.

“Unfortunately, the hiring trend is likely to be reversed in 2019. Many firms are already planning for reductions during the first quarter of 2019 through both attrition and terminations,” warns Francine McKenzie, managing director at Johnson Associates.

Business Insider / November 28, 2018

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New York City has seen an exodus of banks’ back-office workers this year — and can expect to see even more shedding in 2019 — as weaker regulatory oversight has encouraged big deals and boosted profits to all-time highs.

Wall Street, which made a record $62 billion in profit last quarter, is hiring less-experienced compliance officers and back-office employees in places like Buffalo, NY, Salt Lake City and even Poland, as banks shed costs and keep rule-followers out of the hair of the pin-stripe-suit set…

It’s unclear how many people have been displaced, but automation and high costs of working in New York are expected to drive out even more next year, according to a report from Johnson Associates.

“People are looking harder than ever [at cheaper areas] — particularly with tax-law changes. It’s just kind of dumb to be here,” said Alan Johnson, chief executive of Johnson Associates.

New York Post / November 22, 2018

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What changed in 2018 is that markets became more volatile and investors turned increasingly cautious, slowing the flood of new money into cheaper index funds. A decline in assets—and revenue—is no longer a dormant threat for managers. And many are warning it’s going to get worse.

“2019 will be the start of much tougher years for asset managers,” said Alan Johnson, managing director at compensation consultant Johnson Associates.

This year incentive bonuses for asset managers are expected to rise 5%, according to the firm, but that is down from a 7% boost in 2017. Next year, Mr. Johnson predicts bonuses will retract by 5%.

The Wall Street Journal / November 19, 2018

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“The major investment and commercial banking firms continued their strong performance, especially in equities trading and underwriting,” said Alan Johnson, managing director of Johnson Associates and one of the nation’s foremost authorities on Wall Street compensation. “Private-equity firms also turned in a second straight year of healthy financial results and strong fundraising.”

Johnson said 2019 is looking less rosy. “Ongoing business challenges, including fee compressions, geopolitical influences and business efficiencies driven by technology, are likely to have an industry-wide, downward impact on compensation and head count,” he said. “While financial-sector businesses are still inherently healthy, the business challenges are expected to catch-up with them.”

MarketWatch / November 13, 2018

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One way banks are looking to cut costs: get out of the Big Apple.

“Our clients really realize it’s just too danged expensive to do business in New York, Boston and San Francisco,” Johnson Associates Chief Executive Alan Johnson told The Post.

New York Post / November 12, 2018

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“Beginning now through the first quarter of 2019, we expect to see headcount reductions through both natural attrition and selective terminations,” said Alan Johnson, managing director of Johnson Associates.

eFinancialCareers / November 12, 2018

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The asset management segment was initially on track to see a 7% increase in year-end incentives, but starting in the second half of this year projections slid to a 5% increase due, in part, to rising competition among money managers and fee pressures, said Alan Johnson, managing director of Johnson Associates, in a phone interview.

These factors are also expected to lower incentive compensation moving into 2019, Mr. Johnson said.

“What we’ve see with our clients is continuing movement into lower-fee products. It used to be that you’d worry about assets leaving, but now you worry about products going from 100 basis points to 50 basis points. It isn’t just assets leaving, but them moving to lower fee products which isn’t as obvious,” Mr. Johnson added.

Pensions & Investments / November 12, 2018

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For a second straight year, much of the industry will get “moderately” higher incentive payouts in coming months, according to a closely watched annual report released Monday by compensation consultant Johnson Associates Inc. Its projections for raises of as much as 20 percent show jittery markets can be hard on people who help companies execute takeovers, but not so much for stock traders and investors making long-term bets…

…“There was a lot of day-to-day stuff and that’s where these traders make money — in the volatility,” Alan Johnson, managing director of Johnson Associates, said in an interview. “It’s not like they were extremely volatile, but more so than in recent years.”…

The good times may not last.  “We’re not seeing 2019 as rosy,” Johnson cautioned. The report predicts banks will probably face geopolitical turbulence and pressure to lower fees next year, while new technology eliminates jobs and makes it easier for firms to pay less.

Bloomberg / November 12, 2018

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Still, don’t bash Amazon. “It just makes you look desperate,” Johnson said.

Instead, companies should reiterate their mission, vision and values.  “Double down on what makes you a good place to work,” he said.

Johnson recommended that executives consider which employees they most want to retain and make sure they are satisfied. He said that many companies don’t have significant differentials between compensation awarded to their stars and average employees.

“It is hard to pay some people more and some people less. It is human nature to want to even everything out,” Johnson said. “How many people get zero raise? Not enough. How many get to 10 to 15 percent? Not enough.”

Society for Human Resources Management (SHRM) / November 11, 2018

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“Decades ago, employers took a broader sociological view to determine if the real wages of their employees were going up over time,” says Johnson. “Now, employers see wage growth as something out of their control. They may be reasonably competitive with wages or benefits, but it may only be okay for employees, not great. And they think ‘I can’t do much about it because it’s out of my control.’ ”

Human Resources Executive / August 22, 2018

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“At the next board meeting, people will be talking about it,” says Alan Johnson, founder of Wall Street compensation consulting firm Johnson Associates. “It will be front of mind.”

It’s possible, though, that if the company regains market value, “by the end of the year, these days might be forgotten or it may have not really happened,” Johnson says.

Agenda / August 20, 2018

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“The industry has been on a fundraising and realization high,” Alan Johnson, managing director of Johnson Associates, said of private equity.

eFinancialCareers / August 3, 2018

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“It’s going to be challenging to manage people’s expectations,” he said in an interview. “As we get toward the end of the year I think people will expect to get paid more than they will. How do you manage people who get 5 percent more but maybe they were thinking they would get 10 to 15?”

Bloomberg / August 3, 2018

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Compensation Consultant Alan Johnson of Johnson Associates in New York said the potential 3% grid-rate bump is, nevertheless, “dramatic” enough to get advisors’ attention.

“Three points is a lot,” said Johnson when briefed on the details of the plan by a reporter. “Morgan Stanley is signaling that [financial plans and asset gathering] are important to the client, to the business and to the advisor, and whether you agree or not, we’re moving significantly in this direction.”

Advisor Hub / July 30, 2018

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Johnson said he expected equities “to be up for the rest of the year,” but not on par with the “euphoric trading” of 2007 and 2008.

“This is not your grandma’s trading. This is a more constrained, client-driven trading,” Johnson said. “We won’t see perhaps the profits we saw before the crisis.”

Business Insider / May 10, 2018

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“The mantra is hedge funds should make more money in volatile markets, that’s always been their elixir,” Johnson said. “That’s not as automatic as it once was.”
Johnson Associates bases bonus estimates on first-quarter results and conversations with clients. The forecasts often change throughout the year.

Bloomberg / May 9, 2018

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“They’re just going to go to the salary they wanted to do in the first place,” said Alan Johnson, a financial compensation expert who runs the consulting firm Johnson & Associates. “The only reason you would change it because of the tax law is because you never believed in bonuses.”

CNN Money / April 23, 2018

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Similarly, Alan Johnson, managing director and founder at Johnson & Associates, suggests these pay disclosures may be only the beginning. For example, consider the gender pay gap information that companies are being required to disclose in the U.K. this year, he says.

“I think we’re going to have ratios like this in different states in the U.S. that people are going to be required to disclose. Investors are asking about some of these things,” Johnson says.

Agenda / April 9, 2018

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Firms are demonstrating willingness to give hefty pay boosts to particularly talented young tech experts. However, “these big jumps are still cheap relative to the much bigger compensation packages required to retain more-senior employees,” said Johnson Associates managing director Francine McKenzie in the report.

“Even with the recent market volatility, we continue to forecast a positive outlook for 2018 asset management compensation, which would build on the significant pay levels delivered in 2017,” she told Money Management Executive, while noting the trajectory could change if there is a sustained and deep downturn.

“With increased market and sector volatility, we are likely to see more outliers, depending on strategy and focus, than we did in 2017, where many boats rose in tandem with the market,” she says. “Those in the industry that would especially benefit from volatility would be the large brokers whose advice and guidance during turbulence is often sought.”

Overall, she adds, despite the challenges, “large asset management firms are well- managed, positioned and structured, and will continue to offer real career and compensation opportunities.”

Financial Planning / April 9, 2018

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Boards have oversight of retirement plans, but not at a deep level. They generally leave it to management, says Alan Johnson, managing director of compensation consulting firm Johnson Associates. That may be one reason why participation is low at many companies. “I think most companies have looked at 401(k)s as kind of a hygiene factor. You’ve got to have one and it needs to be reasonably competitive,” Johnson adds. “but if you’re well beyond the (minimum), it may not be a good use of (corporate) money.”

Agenda (A Financial Times Service) / March 19, 2018

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“Getting zero bonuses was unheard of a couple years ago, but it happens today,” said Alan Johnson, head of compensation consulting firm Johnson Associates.
“I expect that there are people who will get no bonus” this season, he added.

Reuters / January 19, 2018

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But compensation experts say the change in tax law is not likely to reverse years of upward pressure on executive pay. If anything, companies are likely to make such pay less dependent on performance-based bonuses and give executives a higher salary, they say.

“Some people will hope this reduces executive pay; I don’t think it will,” said Alan Johnson, managing director of pay consultant Johnson Associates.

The Washington Post / January 3, 2018

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“The impact of getting rid of the deduction of state and local taxes is a tipping point for New York, Boston and California as people look at where to create jobs and put people,” Johnson says. “The exodus of people [from expensive cities in states with high taxes] will accelerate, and that’s going to have a big impact on financial services.”

eFinancialCareers / December 6, 2017

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Alan Johnson, the founder of compensation consulting firm Johnson Associates, says that pay is typically 15%-20% less in locations outside of New York where banks are moving jobs. However, the lower cost of living often makes up the difference.

eFinancialCareers / November 15, 2017

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“A strong stock market and a favorable political and regulatory environment are contributing to one of Wall Street’s healthiest years recently,” said Alan Johnson, managing director at Johnson Associates.

Crain’s New York Business / November 13, 2017

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Alan Johnson, managing director of Johnson Associates, attributed the rise in expected bonuses to “a strong stock market and a favorable political and regulatory environment” in a news release announcing the firm’s estimates.

Pensions & Investments / November 13, 2017

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“A strong stock market and a favorable political and regulatory environment are contributing to one of Wall Street’s healthiest years,” Alan Johnson, managing director of Johnson Associates, said in a statement. “As a result, incentives will be up noticeably, especially in asset management and investment banking.”

MarketWatch.com / November 13, 2017

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For the first time in four years, year-end bonuses for bankers in 2017 are set to grow over the prior year, according to consulting firm Johnson Associates Inc. Over all, incentive pay is expected to rise by 5% to 10%, Johnson’s survey found.

Alan Johnson, who runs Johnson Associates and helps banks design compensation programs, said that Washington’s shift toward a softer tone on banks is a big factor in their improving stock prices, which is in turn a big driver of bonuses.

The Wall Street Journal / November 12, 2017

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And one compensation consultant doesn’t believe the new law will help achieve its intended goal. Mr. Johnson remains unconvinced that the New York law will have the desired impact on the money management industry, but instead will drag out an already belabored recruiting process.

“I don’t think it’s going to narrow the gap. But politicians want to believe compensation (in the money management industry) is driven by discrimination and not the market,” said Mr. Johnson. “I don’t think it’s going to have a positive impact.”

Mr. Johnson added he believes the law will simply “make the recruiting process more cumbersome (and) more drawn out.”

Pensions & Investments / October 30, 2017

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“I think at the big programs, that’s a fair estimation,” he says. “They run a pretty big operation. They’re responsible for a lot of money. It’s an extraordinarily competitive business. So, yeah, they certainly look much more like a CEO than they did 20 or 50 years ago, in simpler times when the money was not as big.”

USA Today / October 25, 2017

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That said, Alan Johnson, managing director of compensation consulting firm Johnson Associates, pointed out that the level of director pay is set in a competitive marketplace and has actually grown at a slower pace than that of company executives.

“The real issue is the income growth of the middle [class] has been sluggish,” Johnson told CNBC in a phone interview. “We have to grow our economy so the middle-class American will feel better.”

CNBC.com / October 18, 2017

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“It will actually be worse than it was before – the problems that it was intended to cure will get worse,” Johnson says. “[Recruiters] can certainly ask their salary expectations, and the better the negotiator you are, the further you’ll get with that, but the truth is, most candidates don’t really know [how much they should be paid].

eFinancialCareers / September 13, 2017

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Another issue to consider is how executives and potential recruits will react if the clawback provisions are viewed as too onerous, unclear or open-ended, says Alan Johnson, a New York–based executive compensation consultant. A potential worry for executives could be that “five years after I’m gone there will be a witch hunt, and they’re going to call me the witch,” Johnson says.

Agenda / August 21, 2017

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“He’s done a great job, but the standards to earn it are way too easy,” says Alan Johnson, managing director of New York-based compensation consultancy Johnson & Associates. “You’re going to get paid an enormous amount of money if you finish in the top third of the race? Really?”

MarketWatch / August 16, 2017

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“Regulatory and political unknowns continue to spread caution throughout the industry,” Johnson said in the report. “Market activity and interest rates will be key 2017 incentive drivers going forward.”

Bloomberg / August 9, 2017

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“The rules never really got a full debate, so I don’t think it’s a bad thing that they have been killed, because I think the pendulum has swung too far,” said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm. “But there will be some blowback on this.”

American Banker / July 21, 2017

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The fact is that financial services organisations are moving jobs to lower-cost destinations regardless of whether their personnel want to move – largely because they want to cut costs. For employees, this means taking a lower salary in a cheaper location. Alan Johnson, the founder of compensation consulting firm Johnson Associates, says that pay is typically 15-20% down in locations where banks are moving jobs. But this isn’t necessarily all bad.
“Companies used to apologize to employees but they don’t do that anymore – they say, ‘The sticker number of your comp will be less, but factoring in the cost of living, you actually may come out ahead,” he says.

eFinancialCareers / July 12, 2017

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Alan Johnson, an executive pay consultant who is no fan of excessive compensation plans, says $1 pay schemes for CEOs sound nice, but they rarely work for shareholders. They tend to have a chilling affect on what a company will pay for other top talent. “Was Whole Foods able to get the best talent possible the past 10 years?” Johnson asked.

Bloomberg / June 21, 2017

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The new rule is intended to create a level playing for “bad negotiators” who’ve been paid less (women in particular) and who will in future be liberated from the shackles of their historic low pay. However, by encouraging banks to come in with incredibly low offers in an attempt to flush out pay levels, Johnson says legislators will simply make existing discrepancies worse.

For their part, banks will need to carefully document the process leading to candidates disclosing their pay levels voluntarily. – There are fines of $250k for organizations which actively ask candidates to provide the information. “Banks are going to need a paper trail,” says Johnson. “- You’ll have lawsuits over this. Three years later, banks will need to be able to point to a signed declaration saying the employee gave his or her information willingly.”

eFinancialCareers / June 20, 2017

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Ford’s board may have decided to leave out the cash base pay (which, prorated, would’ve been a little over $1 million) because unlike stock, a direct cash payment could make for poorer optics, said Alan Johnson of the executive compensation consulting firm Johnson Associates.

Fortune / May 25, 2017

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After the first quarter, Wall Street compensation consulting firm Johnson Associates is projecting mixed incentive pay across financial services, with a generally more upbeat business environment and compensation outlook compared to recent years. There’s a long way to go until the end of the year, though, with political and regulatory uncertainty, rising interest rates and ongoing challenges in global markets keeping full-year pay projections cloudy. That said, in general stronger performance has led to optimism that pay will be higher this year compared to 2016.

eFinancialCareers / May 11, 2017

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Pressure on asset management profit margins is driving these pay cuts, the firm notes. “The reality is that compensation is not likely to recover to recent market highs and might even fall further in coming years,” says Johnson Associates managing director Francine McKenzie.

FinancialPlanning / April 25, 2017

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The reason why scandal-plagued companies are willing to pay millions in severance to allegedly bad actors is because they believe it’s the best way to put a crisis behind them and move on, explained Alan Johnson, managing director at Johnson Associates, an executive pay consultancy in New York City.

Society For Human Resource Management (SHRM) / April 24, 2017

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CEO pay cuts at money management firms are following an overall trend for banks that began after the financial crisis as the highly paid top executives of the nation’s largest banks saw compensation drops, Mr. Johnson said.

Pensions & Investments / April 17, 2017

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“It’s someone saying: ‘I can add billions of dollars in value, and for that I want to be paid extremely well,’” said Alan Johnson, managing director of executive compensation consulting firm Johnson Associates Inc. “You don’t see this very often at all. Just like a sports figure, if CEOs believe they’re worth something there’s no reason they shouldn’t ask to get paid.”

Bloomberg / March 4, 2017

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Levin’s large pay package comes as compensation has dropped in the hedge fund industry and firms narrow in on paying for performance, says Alan Johnson, managing director of compensation consultancy Johnson Associates.

“Pay has come down meaningfully. People are differentiating better,” he says. “People who perform continue to stay where they are.”

FundFire / February 22, 2017

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According to Alan Johnson, managing director and founder of compensation consulting boutique Johnson Associates, some boards have moved to reduce discretion in bonus plans in order to appease investors and proxy advisors. “There’s this tension in the marketplace. A lot of it’s driven by ISS and Glass Lewis,” he says. “They hate discretion.”

Agenda / February 17, 2017

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Still, even if Schultz keeps showing up at the office every day, abdicating the CEO role frees him from some of the pressure of answering to shareholders’ concerns—especially after Starbucks stock fell 7.5% last year. And while Schultz probably has enough pull with the Starbucks board to keep his full pay, and then some, the company would likely be better off if he didn’t, says compensation consultant Alan Johnson of Johnson Associates.

“I think you’d want his pay to be cut in half to send a clear message that the other guy is the new guy,” Johnson says. “If taking a few million less helps the transition to the new CEO, that’s the smartest thing he could do.”

Fortune / February 7, 2017

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One recruiter says its mailbox has been jammed with CVs from outraged Deutsche staff who are not on what insiders call the “retention list.” Some of these come-and-get-me pleas are from people with at least ten years’ service, complaining that the bank has no regard for loyalty or performance.

“It’s a dramatic decision Deutsche made,” says Alan Johnson, a veteran pay consultant. “They knew there’d be big fallout.”

Fortune / February 3, 2017

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Alan Johnson, managing director of pay consulting firm Johnson Associates in New York, said the big gains for the leaders of American Express, Goldman Sachs and JPMorgan reflect how stock option compensation can magnify gains in a company’s share price.

“When the stock goes up, with options, you get more leverage,” he said.

Reuters / January 11, 2017

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“I wish more companies would adopt the way [Exxon] pay[s] their executives, where you don’t get it when you leave, you’ve got to earn it, [and] you get [it] delivered over time,” says Alan Johnson, president and founder of compensation consulting boutique Johnson Associates.

Agendaweek.com / January 6, 2017

“In 2017, banks will start to rebound – with some of the onerous regulations rolled back, maybe the banks will start to do better, which would be good for everybody,” he said. “A leading indicator of that is their stocks have done particularly well since the election, meaning the markets believe that this will be a positive change for the banks.

eFinancialCareers / January 5, 2017

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“If you listen to politicians, you’d think bankers are still making money like it’s 2007. They’re not,” said Alan Johnson, who runs the firm and helps banks design compensation programs. “You can make this kind of money working at PepsiCo, and life at PepsiCo is lot more pleasant.”

The Wall Street Journal / November 6, 2016

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“All signs are pointing to a disappointing end to an overall lackluster year on Wall Street,” said Alan Johnson, managing director of Johnson Associates, which conducted the study.

Reuters / November 6, 2016

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Alan Johnson, the founder of Johnson Associates, describes this pattern as a “malaise,” and one that is unlikely to reverse itself anytime soon.

“I don’t see it changing for the next year or two, either,” he said in a phone interview. “The pressures in the industry on profit and fees are going to continue, and I think pay will likely continue to decline in 2017.”

The New York Times / November 6, 2016

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The bank risks angering staff if it abandons cash incentives entirely, said Alan Johnson, founder of New York-based compensation consultancy Johnson Associates Inc. If the board proceeds, it should at least pay cash bonuses to junior staff and structure something creatively for senior bankers that could dramatically increase in value if the bank recovers.

Bloomberg / October 26, 2016

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“Compensation is going to be a much more political process going forward. You’re going to based not only on your merits but what is politically attractive at the moment,” said Alan Johnson, managing director of compensation consulting firm Johnson Associates.

Reuters / September 28, 2016

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“Most [asset management] sales today involve lots of people – it’s not the stereotype of an individual salesman going around picking up orders,” said Alan Johnson, the founder and managing director of Johnson Associates. “With most fund firms now having a distribution strategy across multiple channels, it requires a more nuanced comp system, more of a hybrid – that’s where the world is going, and it’s the kind of thing you’ve got to get right.”

eFinancialCareers / July 26, 2016

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Compensation plans are, nevertheless, meant to modify behavior, and UBS may be trying to send brokers who still like transactions another message with its new plan, according to pay consultants.

“They probably figure that the transformation to fee-based has stabilized and that they need to keep high-producing brokers in place,” said Johnson Associates founder Alan Johnson.

AdvisorHub / June 16, 2016

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Let the employer make the initial offer, says Alan Johnson, managing director of Johnson Associates, an executive compensation consulting firm in New York. The problem, he says, is essentially people are guessing at what the company will give them—and they may undersell themselves.

The Wall Street Journal / June 13, 2016

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“The inequality movement has created a whole backlash against C.E.O. pay,” said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm.

The New York Times / May 27, 2016

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Job cuts and constrained hiring are expected to continue on Wall Street in 2016, with bonuses likely to be lower than in 2015 due to difficult market conditions, according to a study by compensation consultant Johnson Associates.

Reuters / May 17, 2016

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“My clients have come to the conclusion that lots of these people don’t need to be in Midtown Manhattan or the City of London,” said Alan Johnson, managing director of Johnson Associates, a financial services pay consultant. “It doesn’t make sense any more.”

Financial Times / May 15, 2016

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If federal regulators influence clawback decisions, “there’s a high probability it will drive people out of the heavily regulated part of the financial-services industry,” said Alan Johnson, managing director of Johnson Associates Inc., a compensation consulting firm that closely tracks Wall Street. To retain talent, banks and other affected institutions “will just have to pay more” due to executives’ fears that “you may have to give some of [the money] back.’’

The Wall Street Journal / April 22, 2016

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“Although the overall pay rule is tougher than previous versions, it is certainly still more benign relative to European rules,” said Alan Johnson, managing director of Johnson Associates Inc, a compensation consultant serving financial services firms, referring to the proposal.

He said the four-year deferral period “is not overly restrictive.” But the clawback could prove “onerous” since it covers activities of seven years.

“However, the real issue is how it will be determined and who will enforce the clawback?” he said. “Will the government have a role and how consistent will the application be?”

Reuters / April 21, 2016

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If federal regulators influence clawback decisions, “there’s a high probability it will drive people out of the heavily regulated part of the financial-services industry,” said Alan Johnson, managing director of Johnson Associates Inc., a compensation consultancy that closely tracks Wall Street. To retain talent, banks and other affected institutions “will just have to pay more” due to executives’ fears that “you may have to give some of [the money] back.’’

New York Magazine / April 21, 2016

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“Are people going to hold a charity benefit for Wall Street? That’s probably not going to happen — you’re not going to buy those raffle tickets,” said Alan Johnson, managing director of Johnson Associates, which designs executive-compensation programs for financial firms. “But business school graduates are not wanting to go into financial services. They’re wanting to go do something else. We’re below an equilibrium. If pay does not increase in certain parts of financial services, the industry will not get the right talent. It will not be as competitive.”

Bloomberg / April 11, 2016

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Renowned compensation consultant Alan Johnson – who works with most big Wall Street firms – believes that financial services organisations are going to base more roles outside of New York to cut costs. Across the whole country, there will be a reduction of 50k financial services jobs over the next 12 months, Johnson predicts, with approximately 10k of those redundancies in New York. For those who keep their jobs, their pay will drop an average of 10% over that timeframe in the U.S., he said.

eFinancialCareers / March 14, 2016

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But the 10-digit figure shows how important big checks remain in recruiting retail brokers, despite the complaints of senior executives, said Alan Johnson, managing director of compensation consulting firm Johnson Associates.

“[Our] clients have always said that we really don’t want to do this, and then they do it as much as ever,” Johnson said. “It shows you how competitive the industry is. Firms want to attract good people, and they don’t want to lose the good people they’ve got.”

AdvisorHub / March 8, 2016

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While the boards of big banks all set dollar-price targets for equity awards, some companies determine grants based on the number of shares. Alan Johnson, managing director of compensation consulting firm Johnson Associates, said he prefers a dollar target because setting a unit target could mean runaway compensation if a stock explodes in value.
“It works reasonably well, so long as you do it at the same time every year,” Johnson said. “Some people will say ‘My god, they’re getting a break, getting a low price,’ but that assumes there’s some kind of normal price.”

Bloomberg / February 22, 2016

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The decrease is providing the first pocketbook test of the new bonus practices banks established in the wake of the 2008 financial crisis. “It’s a big deal,” said Alan Johnson, managing director of pay consultant Johnson Associates. “The business is down, the market is down, the stock is down. It couldn’t come at a worse time.”

The Wall Street Journal / February 18, 2016

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Mr. Johnson cited volatile markets, which pinched firms’ flows, as the primary reason bonuses were down at the end of 2015. Other factors include money management firms increasing their costs by adding people and opening offices around the world, he said.

Still, Mr. Johnson said he doesn’t see this as something to be particularly concerned about.

“Money management is doing better than other financial service firms,” he said. “People in asset management are as well paid as anybody, the culture is pretty good and the work is pretty fun.”

Pensions & Investments / February 8, 2016

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Roughly translated, this means layoffs in costly cities like New York and London in favor of hiring in cities like Mumbai, said Alan Johnson, a compensation consultant for Wall Street brokerages.

“Downsizing and relocation, you’re going to see both.”

The pay cuts come as Wall Street struggles with falling demand for trading and underwriting. They are also a reflection of Wall Street’s push, in the aftermath of the financial crisis, to squeeze out higher profits through aggressive cost-cutting, even as revenue has remained largely flat.

USA Today / January 21, 2016

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Instead, Mayer’s 2014 options were granted on Feb. 27 with a strike price of $18.87, even as the stock closed at $38.47 that day. As at many companies, the number of options she ultimately collected hinged on performance targets. Thanks to the way hers are dated, those instruments would have generated $14 million if exercised at the close of trading on Tuesday — rather than nothing.

“It’s extremely unusual,” said Alan Johnson, managing director of compensation consulting firm Johnson Associates. “It’s been a windfall for her.”

Bloomberg / December 9, 2015

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Analysis by the Financial Times shows that graduates from the world’s top 10 MBA schools are 40 per cent less likely to go into investment banking now than they were before the financial crisis.

Pay and lifestyle are the two biggest deterrents. Alan Johnson, managing director of Johnson Associates, a Wall Street pay consultant, estimates that the total pay pool across Wall Street banks will be down by about 10 per cent this year. “It’s less pay, more hassle,” said Mr Johnson.

Financial Times / November 11, 2015

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Alan Johnson, managing director of New York compensation consultants Johnson Associates, predicts average bonuses at the big investment banks globally will be down 10% to 15% this year but with wide variation between different product areas. And he says that the gap between pay at US banks and European rivals is likely to widen.

Financial News / November 9, 2015

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“It’s a disappointment,” said Alan Johnson, managing director at New York-based Johnson Associates. “It’s been such an uncertain year, a stressful year. Pay is down moderately, but it feels worse.”

The uncertain mood across the industry should continue into 2016, said Mr. Johnson, who predicted many firms would take steps to shrink their workforces again to help lift returns.  “This year will be an inflection point,” he said. “Firms are going to have to look at their cost structures again.”

The Wall Street Journal / November 8, 2015

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Alan Johnson, founder of Johnson Associates, said many in the industry had been anticipating a rebound. This year, though, those hopes have been fading.

“We kept expecting next year will be the year,” he said. “And it hasn’t really happened — and I don’t see it for the next three to five years.” He added, “It’s hard to see the swell of demand that will bail us out here.”

New York Times / November 8, 2015

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Big banks and brokerages slashed their bonus pools last quarter after pitiful trading activity led to double-digit revenue declines. Unless things turn around — and soon — Wall Streeters will see shrunken bonuses and possible layoffs, experts said.

“The sun could shine brightly the rest of the year, but most people would be quite surprised if that happened,” says Alan Johnson, a compensation consultant for Wall Street brokerages. Johnson warned that bonuses could be down as much as 10% this year — followed by job cuts next year — if trends continue.

USA Today / October 21, 2015

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Banks “are starting to restructure their pay strategy because five or six years after the crisis they have extra costs,” Johnson said. “It’s just not working.”

Fortune Magazine / October 15, 2015

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“You’re in business to benefit shareholders, so you should ride up and down based on how the stock does,” said Alan Johnson, an executive compensation consultant at Johnson Associates in New York. “We want our executives in America under pressure. That’s a good thing.”

Bloomberg / October 2, 2015

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Wall Street bonuses won’t be paid until the beginning of 2016, but the people who track them are already predicting a windfall for the investment bankers who advise companies on corporate combinations. In fact, they’re predicting it’ll be the biggest payout in years. Alan Johnson, one of Wall Street’s top compensation consultants, estimates that overall compensation for mergers and acquisitions bankers could be up by as much as 50% this year.

Fortune Magazine / September 30, 2015

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“Since the financial crisis, their CEO pay has come down, and their median employee pay is generally high,” Alan Johnson, managing director of compensation-consulting firm Johnson Associates, said about financial-services companies. “They don’t have a lot of seasonal workers — they have a lot of full-time versus part-time workers. Their ratios will not be as high as people expect.”

Bloomberg / September 2, 2015

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When companies begin to disclose CEO-to-worker pay comparisons in 2017, it could demonstrate that women CEOs have more reasonable ratios. But it may more likely be the case that firms with higher proportions of women employees will have more eye-popping numbers.

“I think that’s likely to be true. The way the ratio is calculated, it’s intended to skew and make companies that employ a lot of part-time workers look worse,” Johnson said. “So I would think in some industries — fashion retailing, fast food, some of the big department stores — they employ not only a lot of women, but a lot of part-time women.”

The Street / August 27, 2015

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…“I think the impact will be relatively small, as I don’t see investors spending a lot of time looking at it,” says Alan Johnson, managing director of Johnson Associates, a compensation consulting firm. “But it will be one more headache for companies, and it will require some additional expenses to comply with.”…

Global Finance Magazine / July 20, 2015

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‘Uncomfortably Close’

The 61 percent tally is “uncomfortably close to 50 percent,” said Alan Johnson, managing director of compensation-consulting firm Johnson Associates. “You don’t want to fail the vote, not at a big bank.”

Bloomberg / May 19, 2015

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…But some say the rules seemed designed more to shame companies and their executives than to provide shareholders with any meaningful insights. “If you are a serious shareholder, you know what the stock has done, and you can come to your own conclusion about whether the C.E.O. is the right leader,” said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm in New York. “The real purpose of these rules was to embarrass corporate America.”…

The New York Times / April 30, 2015

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…While Mr. Fleming was one of the highest paid of his peers, his raise was consistent with brokerage executive pay increases across the board, according to Jeff Visithpanich, a managing director at Johnson Associates, which specializes in executive compensation.

“If you look at just asset management, I would take that to say they thought he did a good to very good job,” Mr. Visithpanich said of Mr. Fleming’s salary. “There are some [raises] higher than 10%, but the middle of the pack is high single digits to 10%….

Investment News / April 6, 2015

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…“In good times the generals eat first and the troops eat last,” says Alan Johnson, managing director of compensation consulting firm Johnson Associates Inc. With the crisis still fresh in people’s minds, he says, that dynamic is much less pronounced…

The Wall Street Journal / April 6, 2015

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…To compete, Wall Street needs to improve its treatment of workers, says Alan Johnson of compensation consulting firm Johnson Associates.

“The conventional wisdom for 30 years was that if you want to make the most money you go to Wall Street. But now you can make more money in tech, and you can have a more interesting and better culture,” he said.

USA Today / March 26, 2015

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…Alan Johnson, managing director of compensation consultant Johnson Associates, says the design of comp programs for banks has stabilized as companies have come to terms with regulations.
He says that, in general, executives have a small salary, a moderate cash bonus and performance-based stock…

Agenda / March 19, 2015

…Alan Johnson, managing director of compensation consulting firm Johnson Associates, said executives should expect to take a pay cut if there’s a scandal on their watch, even if the conduct happened prior to their time in that role. “The expectation is, you take a hit. It may not be your fault…the lesson for executives is to expect it,” said Mr. Johnson. His advice: Get out ahead of the board and volunteer for the pay cut, or give up an expected bonus. “It’s probably going to happen anyway, so why go through the pain of [the board] having to agonize over it?” he said….

The Wall Street Journal / March 11, 2015

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…Johnson Associates says cash and stock bonuses for the banking industry are expected to be largely stagnant from a year ago. The mostly flat bonuses are driven by two things, said Alan Johnson, managing director of the firm.

“It’s weak revenue growth and continued cost from regulation and litigation,” he said. “Profits are so-so.”….

Charlotte Observer / March 9, 2015

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…“Variable compensation is usually tied to performance or profitability in a way that lets the manager know where he stands at all times,” says Alan Johnson, a managing director with Johnson Associates. “You may not see that degree of clarity at larger fund firms.”…

929 Media / March 9, 2015

…The banks “went way further than anybody else in financial services and that became a competitive disadvantage to get people [and] keep people,” said Alan Johnson, managing director of Johnson Associates.
….

The Wall Street Journal / February 17, 2015

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…The same month, Johnson Associates said trader bonuses would fall by as much as 10%. Investment-banker payouts could jump by up to 15%, according to the compensation-consulting firm…

The Wall Street Journal / January 12, 2015

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…Johnson Associates managing director Alan Johnson believes the public and politicians such as Sen. Elizabeth Warren (D., Mass.) are so focused on demonizing the banks they are willing to overlook extremely high pay in other industries, even ones that are very similar to banking and employ similar people….

The Street / January 9, 2015

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…”I don’t think they, unfortunately, have done enough to encourage ownership of firms,” said Johnson Associates managing director Alan Johnson, who has spent 25 years advising big financial companies on their pay practices…

The Street / January 9, 2015

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An asset manager’s compliance staff does more than just say “no” to their colleagues, they help win mandates.
….Asset managers no longer want someone who just tells colleagues what isn’t allowed, but instead someone who can offer creative responses to problems and propose new ideas, says Alan Johnson, managing director of Johnson Associates.

….Compliance as a career is a new concept. Previously, compliance was often an extra duty thrown on the operations team, and not something people actually sought out as a job, says Johnson. But as regulations continue to grow and dominate the industry, “compliance is only going to get bigger,” says Johnson. While not as “sexy” as other investment industry positions, compliance offers reasonable security and good pay, making it a very appealing career choice, he says.

FundFire / December 12, 2014

Strong investment performance and positive inflows will translate into more money in the pockets of asset management firm executives in 2014, new research has found….

“The increases in pay in the asset management business make it one of the most attractive parts of financial services,” says Alan Johnson, managing director of compensation consulting firm Johnson Associates….

Firms are moving away from compensation plans based solely on commission and adopting a “hybrid” model that includes commissions and some discretion, Johnson says. “The contribution [of sales people isn’t as obvious] as it was before,” he says. “That is an important change in the industry.”…

FundFire / December 12, 2014

Equity analysts at asset managers often enter the position for life, a decision that could be paying off with better compensation and work culture than their investment bank counterparts.

Before the financial crisis, working on the sell-side of finance was known to be arduous but lucrative. Since then, industry changes have lowered the pay and eliminated many positions, making the buy-side higher paying for analysts, says Alan Johnson, founder of compensation consultancy Johnson Associates.

“Now you make more money and the culture is better,” he says. “It’s a good time to be in research in asset management.”

FundFire / December 12, 2014

Making it big in media means generating hits. And while top executives may not be hands-on with every decision, they are where the buck stops.

Take Disney’s animated blockbuster “Frozen,” which grossed $1.2 billion at box offices worldwide. While Disney CEO Bob Iger didn’t make the movie, he did orchestrate Disney’s $7.4 billion acquisition of Pixar in 2006, which brought in talented executives to help reform Disney’s faltering animation studio.

“With movie studios and the media, it’s more of a talent business. You have highly paid people at all levels,” said Alan Johnson, managing director of Johnson Associates, a compensation consultant in New York. “The view is the right CEO can make a big difference.”

Huffington Post / December 12, 2014

It is not unusual for a CEO to leave a firm with a golden parachute worth tens of millions of dollars…..
But C-suite parachutes are not as golden as they were before the financial crisis, says Alan Johnson, managing director of the compensation consulting firm Johnson Associates.

“The trend has been for a reduced severance over the last five or 10 years for CEOs,” he says. “That was one of [shareholder activists’] real hot-button issues.”

These days, firms are offering executives a year or two of pay, down from three, he says. “The general view is you were paid well while you were there and the careers were shorter,” says Johnson……

Ignites / December 12, 2014

….Morgan Stanley isn’t the only bank de-emphasizing delayed gratification for its bankers and traders. Deferred bonus pay has been on a slow decline since 2010, according to consulting firm Johnson Associates Inc. Earlier this year, Johnson Associates estimated about 36% of a $1 million bonus on Wall Street is deferred, compared with 45% in 2010.

Banks have gradually inched back toward paying more cash in order to be more competitive in “keeping and attracting talent” that might otherwise leave for hedge funds and private-equity firms, said Alan Johnson, managing director of Johnson Associates.

The Wall Street Journal / December 5, 2014

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From the ashes of the financial crisis emerged a big change in how Wall Streeters got paid. Out went the legendarily massive year-end cash bonuses. In came IOUs.

“People were screaming bloody murder,” recalled Alan Johnson of compensation consultancy Johnson Associates. “They were yelling, ‘Pay me now!’ ”

Crain’s New York Business / November 29, 2014

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Wall Street’s bonuses—aka the ultimate measure of all that is important and worthy in finance—might be shrinking for many a banker this year. That’s the dismal news from Johnson Associates, a compensation consulting firm, which released its annual survey on the matter on Monday.

Slate.com / November 10, 2014

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….Meanwhile, many retailers such as IKEA, Gap, Whole Goods and Costco aren’t standing idly by, waiting for Congress to take action. They’re already paying workers above the federal minimum wage, adds Alan Johnson, managing director at Johnson Associates, a New York-based consulting firm that specializes in compensation.
Minimum-wage laws have also been passed in 22 states, including Michigan, Montana and Missouri, with wages higher than the federal rate.

All things considered, that’s partly why the survey’s results don’t surprise Johnson. Although there are people willing to work for minimum wage, he says employers realize that the savings simply aren’t worth it when considering the problems that sometimes accompany low wage earners like high absenteeism.

Johnson believes an increase to between $10 and $11 per hour is “the sweet spot?. Still, wages are tricky and vulnerable to snowballing, creating even more problems….

Human Resource Executive / October 13, 2014

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….Although Gorman’s wealth management target was the most aggressive cut to pay ratios in Morgan Stanley’s three business units, the 55 percent ratio is still much higher than the 40 percent or less he outlined for institutional securities and investment management.

“Bank executives say, it’s a high-cost, high-aggravation business and why can’t we bring it under control?” said Alan Johnson, a Wall Street pay consultant, referring to the challenge of managing the personalities and pay packages of thousands of individual advisers. “They think about it every day – even just getting another 1 percent on billions of dollars’ of revenue is a lot of money.”….

Reuters / July 1, 2014

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Shareholder advisory firm ISS strongly disapproves of Walmart Stores Inc.’s corporate governance, assigning it “8” on a 10-point scale where 10 indicates the highest level of risk….

Alan Johnson, managing director at compensation consulting firm Johnson Associates, told Risk & Compliance Journal that Walmart’s practice of adjusting compensation when performance targets are not achieved is neither unusual nor unjustifiable. “I have many clients that do that,” he said, noting that in a complex, global company facing pressures on several fronts, boards often want to retain flexibility. However, he also noted that “Walmart does not do a very good job of explaining.” But when half of the stock is in the control of the founding family, shareholder outreach may be an understandably low priority….

The Wall Street Journal / May 28, 2014

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Coming in a year in which corporate earnings gains continue to come mostly from job cuts and streamlining instead of organic growth, as well as nearly a decade of stagnant wage growth for rank-and-file workers, continued gains in CEO pay underscore the disconnect between boardrooms and Main Street. Among the nation’s 104.8 million full-time workers, average median annual wages were $40,872 last year, up just 1.4% over 2012.

“The extremes are getting bigger and run smack dab into the debate of income inequality,” says veteran compensation consultant Alan Johnson.

“Boards are quite concerned over how executive compensation will be perceived. There’s very little of, ‘Let’s make Mr. Big happy because we’re all friends and he’s a nice man.’ But you try to balance what’s competitive. I tell boards that their primary goal is to do what’s best for shareholders. If a CEO has created shareholder value, whether they’re good or lucky, and things look like they’re going to go well, you’re probably going to have to pay a lot.”

USA Today / April 3, 2014

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Big U.S. companies appear to have handed out smaller increases in compensation to their chief executives in 2013 than in 2012, mainly as a result of reduced grants of stock options, according to an early review of annual regulatory filings.

Based on disclosures from 46 companies in the Standard & Poor’s 500 Index that had filed annual compensation reports by March 11, the median compensation increase for a CEO was 1 percent to $8.64 million. That was a slower rate of increase than this group of 46 received for 2012 when its median CEO pay rose 15 percent to $8.53 million. The median compensation for CEOs in S&P 500 companies overall increased about 5.5 percent for 2012.

The review, conducted for Reuters by proxy adviser and corporate governance consulting firm Institutional Shareholder Services, provides an early peek at compensation trends but ISS cautioned that there could be significant changes once all companies have reported and that the 46 companies may not be representative of trends for companies in the entire index. Most companies will file their executive compensation data over the next few weeks…..

“They’re not going to get monster rewards,” said Alan Johnson, managing director of pay consulting firm Johnson Associates in New York. “The indications are that companies continue to do a better job of matching up pay with performance.”

Reuters / March 17, 2014

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Year-end bonuses are tethered to the tides of the market and the tide was high in 2013. According to a FundFire reader poll and expert interviews, asset managers and financial advisors mostly saw their compensation go up or hold steady compared to last year’s take.

Pay bumps for both institutional asset management professionals and financial advisors are largely attributable to the bull market in equities, experts say.

The reason is particularly straightforward in the institutional space, according to compensation consultant Alan Johnson, where he said compensation was typically up 10 to 15%. In fact, the bonus season seems to have been relatively predictable—in a December FundFire poll, 89% of respondents predicted their compensation would grow or stay the same, compared to the 84% who reported that in last week’s poll…..

“This year it’s a simple story,” says Johnson, managing director of New York-based Johnson Associates. “It’s attributable to two things really: better markets and firms doing a good job of getting their costs under control. They had the right-sized organizations, the markets were favorable and they were greeted with asset flows they hadn’t seen in a while.”

FundFire / March 3, 2014

Larry Fink is one lucky guy.  Fink will take home in excess of $20 million for his Wall Street work last year, when he successfully guided New York’s largest asset-management company, BlackRock.

“He’s right at the top. He’ll be north of $20 million — and, of course, BlackRock has done great,” compensation expert Alan Johnson told The Post.  Johnson says BlackRock, along with other huge asset managers, are part of the latest “seismic change” in 2013 salary and bonuses….

“The other surprise,” said Johnson, “is how long it has taken the industry to recover from the financial crisis. We are all seeing the light now at the end of the tunnel.”

New York Post / February 8, 2014

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JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon, who got a 74 percent raise for his work in 2013, stands to reap a separate and bigger payday within months.

The bank’s board of directors, having delayed a decision for more than a year, has yet to say whether Dimon, 57, can collect 2 million stock options originally granted in 2008 and now worth about $34 million. Last week, the board increased his annual pay to $20 million from $11.5 million a year ago, when he was penalized for faulty oversight of botched derivatives bets….

After Dimon’s incentive package was created six years ago, JPMorgan grew to become the nation’s largest bank with shares outperforming the industry, and then snapped a three-year run of record profits as costs from government probes surged. The board’s decision to boost Dimon’s annual pay despite mounting legal settlements shows he probably will get the full options award, said Alan Johnson, founder of compensation-consulting firm Johnson Associates Inc.

“It’s obvious the board wanted to send a signal about what they think of him,” Johnson said. “It’d be very inconsistent to say, ‘You’re our guy, and we want to send an emphatic public message that we think very highly of you.’ And then, ‘Oh by the way, you didn’t earn this over the last five years.’”

Bloomberg / January 27, 2014

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Wall Street’s senior executives have been holed up in conference rooms across Manhattan the last couple of weeks, locked in tense all-day sessions. The special project: dividing up this year’s spoils as bonus season approaches. Over the last month or two, headlines have speculated that 2013 will turn out to be an excellent one on Wall Street. By some estimates, bonuses should rise as much as 10 percent across the board, if not more. A survey of bankers in London released over the weekend suggested they expected to receive bonus increases of as much as 44 percent. By the sound of it, you would think that being a banker on Wall Street once again meant you were a 1980s-style Master of the Universe…..

According to Johnson Associates, a compensation consulting firm, big banks set aside $91.44 billion for 2013 bonuses in the first nine months, down from $92.49 billion in the period a year earlier. An investment banking managing director might make $850,000, down from at least $1 million a couple of years ago and $2 million to $3 million before that. A vice president is likely to receive about $400,000, compared with $750,000 a couple of years ago.

The New York Times / December 17, 2013

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Nearly 50% of respondents to a recent Ignites reader survey said they expect a larger bonus for 2013 than they received for 2012, with 43% expecting a moderate increase and 6% predicting a significant increase.

The results are as of late afternoon Tuesday, with 437 readers voting. Click here to vote in the ongoing poll. Just 17% said that they expect their bonuses to fall below their 2012 payout, with 12% envisioning a moderate decrease and 5% expecting a significant decrease…

Alan Johnson, managing director of compensation firm Johnson Associates, also sees the poll results as an on-target prediction of 2013 bonuses. “They can look to the markets. There’s transparency about what drives business and thus compensation,” Johnson says. “If you tell me what the average for the S&P [500] will be in 2014, I can give you a pretty good estimate about bonuses.”

Ignites / December 4, 2013

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When Wall Street firms announce their 2013 bonuses in December and January, employees will see an average bump of 5% to 10%, according to a closely watched compensation survey put out by New York compensation consultants Johnson Associates, which releases three Wall Street pay reports a year. To collect its data, the company queried eight of the nation’s largest investment and commercial banks and 10 of the biggest asset-management firms. It also looked at publicly available data.

Though the overall picture is a positive one for Wall Streeters, with bonuses rising for the second straight year, some employees will do worse than others. According to Alan Johnson, Johnson Associates’ managing director, firms will pay out differing amounts to different divisions. “A firm is really a combination of a bunch of businesses,” he explains….

“Banks are making a lot of money and they’re all fundamentally healthy,” says Johnson. “Their risks are under control but they still have not fully recovered from the financial crisis. The reality is the world economy has not recovered.” There is obviously still time before the end of the year and an uptick in trading or deals could change the bonus picture.

Forbes / November 7, 2013

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Money management professionals can expect to see a jump of 10% to 15% over last year’s bonus payouts, according to projections from compensation consultant Johnson Associates.The projection matches Johnson’s preliminary estimate of the same range in May.

Incentive payouts for professionals in hedge funds, equities, private equity and prime brokerage will increase anywhere from 5% to 15% compared to last year.

“This year is shaping up to be a relatively strong one for the asset and wealth management industries,” said Alan Johnson, managing director of Johnson Associates, in the report. “However, ongoing cost-cutting initiatives across the financial services industry, combined with continued uncertainty and an uneven economic recovery are keeping incentives somewhat in check.”

The projections are based on third-quarter trends in the financial services industry, according to the report.

Crain’s Detroit Business / November 7, 2013

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When it comes to compensation, it looks as if 2013 is going to be remembered as a pretty good year to have worked on Wall Street, unless you are a fixed-income trader.

Financial advisers, asset managers and underwriting investment bankers can expect their 2013 bonuses to rise as much as 15 percent, according to a closely watched compensation survey to be released on Thursday. Over all, Wall Street employees can expect year-end bonuses to grow 5 to 10 percent on average, the second consecutive year of increases, according to the survey, produced by Johnson Associates.

Bonuses for bond traders, who had a terrible year because of interest rate instability, could drop by just as much or more….“What’s interesting is, for decades almost every year the big Wall Street firms were the highest-paid firms in financial services,” said Alan Johnson, managing director of Johnson Associates. Now, however, the big asset managers are “on par” with what those big firms are making, he said.

Johnson Associates, based in New York, surveyed eight of the country’s largest investment and commercial banks, 10 of the largest asset-management firms and public data.

The New York Times / November 7, 2013

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Wall Street’s bonus season should be a good one for those who manage other people’s money. But for many bond traders and merger bankers, 2013 could be a year to forget.  Year-end bonuses among 18 large banks, securities firms and asset managers could rise 5% to 10% this year, paced by higher payouts for asset-management and wealth-management employees, according to an analysis by compensation consultant Johnson Associates Inc.

The mood may be more subdued on bond-, currency- and commodities-trading desks and within merger-and-acquisition departments—two of Wall Street’s traditional power bases.  Johnson forecasts a 5% to 10% drop in the bonuses paid to merger bankers, while fixed-income traders could see payouts fall more than 15%…

Despite the mixed money bag this year, the average Wall Street senior official is still doing quite well. In investment banking, a managing director earns about $850,000 a year in salary and bonus, while a vice president, usually one or two rungs below a managing director, collects $400,000, said Alan Johnson, managing director at Johnson Associates.

On trading desks, managing directors average about $750,000 a year and vice presidents $350,000, he said. Big pay packages are less common than they used to be. “There used to be a lot of two or three millions,” Mr. Johnson said.

The Wall Street Journal / November 7, 2013

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Wall Street’s biggest risk takers – its bond traders – will probably see their bonuses drop this year, while people in safer roles, such as money managers, will likely get a boost, according to a forecast by compensation consulting firm Johnson Associates.

Overall, it said, individual Wall Street bonuses may rise 5 to 10 percent, on average, compared with last year, as the industry continues its halting recovery from the 2007-2009 financial crisis. Top executives of Wall Street firms will see bonuses rise by as much as 5 percent, Johnson Associates said.

But Alan Johnson, who heads the firm, said there is a wide disparity in payouts among business lines. The bonus spectrum reflects new priorities for Wall Street as much as market conditions, he said…

“From a regulator’s perspective, that’s what you want,” said Johnson. “You want the banks to be in client businesses that use other people’s money so that they’re not too dependent on trading.”  Rising stock markets and weakening fixed-income markets have also been a factor in helping retail brokers and hurting bond traders, Johnson said.

Reuters / November 6, 2013

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The nation’s biggest banks are getting squeezed from almost every direction, quarterly reports show, from slumping mortgage demand to a sluggish economy and tumultuous bond markets.

The result has been a lackluster third quarter for lenders from behemoths like J.P. Morgan Chase JPM +0.62% & Co. and Citigroup Inc. to regional banks such as PNC Financial Services Group Inc. and M&T Bank Corp.

The 10 largest traditional commercial banks and securities firms in the U.S. that have reported earnings thus far posted a 6.9% decline in combined adjusted net income, to $17 billion. Adjusted revenue totaled $116 billion for the quarter, a 4.8% decrease from the same period in 2012…

Alan Johnson, managing director of New York-based compensation-consulting firm Johnson Associates, estimated fixed-income, currencies and commodities employees’ year-end pay will fall 15% from last year. “People are going to be frustrated,” said Mr. Johnson, adding that “it’s going to be tough to find much greener pastures somewhere else.”

The Wall Street Journal / October 18, 2013

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Overall, bonuses on fixed-income, currency, and commodity trading desks will likely be down 10 percent to 15 percent, said Alan Johnson, head of the Wall Street compensation consulting firm Johnson Associates. It could be the third or fourth year in a row in which some Wall Street bond traders get $0 bonus checks, he added.

Just two months ago Johnson had predicted bonus increases of 5 percent to 15 percent for fixed-income traders, but since then the Federal Reserve has decided not to start winding down its bond buying stimulus program, and gridlock has hobbled Washington. Both have alarmed investors who are unsure of where markets are heading, and are reluctant to make huge bets that could quickly turn against them.

A mid-level Wall Street trader might earn $500,000. Before the crisis, total compensation might have been closer to $800,000, said Johnson of the Wall Street compensation consulting firm Johnson Associates.

Reuters / October 15, 2013

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As reported yesterday by the Wall Street Journal, Daniel P. Stipano, deputy chief counsel, Office of the Comptroller of the Currency, called on banks to tie compensation to compliance, and said, “If you don’t do that, you’re really just engaging in empty talk.” The reaction from some in the industry: where have you been for the past five years?…

“I think the big story may be that a senior regulator is clueless about how his own government is regulating pay,” said Alan Johnson, a compensation consultant for financial services firm Johnson Associates. “The banks have embedded this in their pay systems as best they can, they spend a huge amount of money monitoring this kind of stuff. Compliance, following the rules, taking too much risk–they take those kinds of things extraordinarily seriously.” Indeed, there’s evidence pay is already reflecting compliance, at least on the downside. In June, a report by the consulting firm Equilar and the Financial Times found bank CEO pay down about 10% in 2012 on investor and regulatory pressure.

The lowest paid CEO in the study was Barclays CEO Antony Jenkins, whose predecessor, Bob Diamond, exited in the wake of the Libor scandal; Jenkins himself took no bonus “because of various scandals, including Libor,” the FT said. Earlier this year, Jamie Dimon saw bonus cut in half and faced a boardroom battle over splitting the CEO and chairman roles in the wake of compliance problems including the London Whale trading scandal.

In August, Wall Street Journal financial editor Francesco Guerrera wrote of a new “era of regulation” in banking. The open question seems not to be whether banks are adopting executive comp programs tied to compliance, but what unintended consequences might follow that focus on compliance.

The Wall Street Journal / September 27, 2013

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Wall Street is highly profitable again, but cost-cutting and regulatory pressures should keep compensation totals from increasing at near the same rate. We talked to Alan Johnson, founder of compensation-consulting firm Johnson Associates Inc., to discuss the presumed winners and losers of 2013 and the potential impact of EU bonus on both sides of the pond.
What do you expect from Wall Street bonuses this year?
I think certainly all indications are this is a positive year. Wall Street bonuses will likely be up 5-10% on the year, with the news being more positive for U.S. bankers due to geography and their recent wins. It’s an unusual year though, as everyone seems to be headed in same direction. Asset managers, banks, insurance companies – they’ll all see around the same rise.
Any occupations that you expect to be better compensated than others?
I think some of the trading businesses in equities and fixed income will see a nice rise in bonuses. Investment bankers will do worse due to volumes not fully coming back.

eFinancialCareers / September 11, 2013

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Consultant relations professionals are resisting calls to make their compensation more long term to align it with the duration of their clients’ investments, recruiters say, following recent European proposals along those lines that would have affected U.S. managers with E.U. arms.

In July, the European Union rejected legislation that would have capped asset managers’ bonuses and forced compensation to be deferred over longer periods of time. The proposed restrictions came on the coattails of a successful law imposing similar restrictions on bankers…

Alan Johnson, managing director at compensation-consulting firm Johnson Associates, says he works with clients who would like to switch their consultant relations staff over to a commission structure. But Johnson discourages that idea, saying that consultant relations professionals should be encouraged to take their time developing relationships and meeting the needs of the consultants, not the other way around. “If you motivate people to push what’s hot at the moment, you’re not going to have anything in the future,” says Johnson. “It’s a long term relationship, and the impact [consultant relations] have is indirect.”

Just as sales professionals have not responded well to attempts to switch their compensation to a bonus structure, as reported, consultant relations professionals do not usually like a commission structure. “It takes years to foster relationships,” says Johnson. Paying consultant relations a more black-and-white commission basis could make it difficult for them to earn commission in the earlier years of their career, as well as in lean sales periods.

While deferred commission payments may work for sales people in order to encourage better retention, it’s not a necessary hook for consultant relations staff, according to Johnson. Consultant relations professionals generally have better retention as their jobs are seen as less stressful and more long-term given that they involve developing relationships in slow moving bureaucracies. Nevertheless, not everything about a consultant relations pro’s duties are laid back. “[Consultant relations] a hard job in an industry where people want to get things done quickly,” he says.

FundFire / August 22, 2013

Wall Street may feel as if it’s suffering – coming under more intense scrutiny from regulators, and anxious about the impact of the Federal Reserve’s much-anticipated “tapering” of quantitative easing. Its most recent crop of earnings reports have suggested otherwise, though. The Street is doing quite nicely – and, according to a just-released survey from compensation consulting firm Johnson Associates, so are many of its employees.

The Fiscal Times / August 13, 2013

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The discrepancies are the latest wrinkle in the final writing of the Volcker rule, which will force banks to scale back bets they make using their own capital. Banks know the broad outlines of the rule, but regulators may not issue a final version until later this year, leaving banks little time as they scramble to comply by July 2014.

The employee-participation provision—designed to avoid a situation where banks, in the event of a crisis, rush to rescue heavily employee-invested funds, said a person involved in the rule-making process—is causing particular consternation…

Alan Johnson, managing director of New York-based compensation-consulting firm Johnson Associates, said he has worked with banking clients frustrated with the lack of guidance on the employee-participation portion of the rule. “This is just one more thing where the rules weren’t quite clear,” he said. “The skeptics said it would take a long time for the rules to come out, and I guess they were right.”

The Wall Street Journal / July 17, 2013

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The fortunes of large financial services companies have improved dramatically from the dark days of the recession, but paychecks for the leaders of those companies still aren’t what they used to be.  Compensation at broker-dealers and asset-management firms generally has increased along with the recovering financial markets during the past two years, but it remains substantially below pre-crisis levels, consultants said..

“There’s usually a premium to work on Wall Street, but it’s shrunk,” said Alan Johnson, managing director of compensation consultant Johnson Associates Inc.  He characterized last year as “so-so” overall for financial services executives and suggested that the fallout from the financial crisis continues to suppress executive-pay levels.

“Some people still believe that executives in this industry should make very little,” Mr. Johnson said.

Crain’s New York Business / June 16, 2013

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Many industry professionals are optimistic that their 2013 compensation will be higher than last year’s pay.
That is according to the results of an Ignites poll that also found nearly 40% of participants predict they will earn about the same amount this year as last year.

Roughly 36%, or 156 voters, expect their total 2013 pay to be slightly higher than last year’s earnings, while 10%, or 46 voters, believe it will be much higher…

The poll results “are consistent with the general perception that the industry is continuing to improve, but perhaps not all boats are rising, or rising at the same rate,” says Francine McKenzie, a managing director at compensation consulting firm Johnson Associates. McKenzie’s firm estimates incentive pay increases of 10% to 15% in 2013 for industry professionals.

Ignites (A Financial Times Service) / May 30, 2013

Wall Street bonuses and staff levels are expected to rise this year as trading and deal-making activity pick up, according to a closely watched report released on Friday by a compensation consulting firm.  Johnson Associates predicts that senior bank executives will receive bonus increases of 5 percent to 15 percent, with investment bankers getting the biggest potential bonus increases of up to 20 percent.

The firm, headed by long-time industry pay consultant Alan Johnson, cited “signs of economic recovery in the United States and positive market momentum” in its report, but also noted that new regulations and a slowdown in Europe may weigh on bank profits and employee compensation.

CNBC / May 17, 2013

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Corporate governance experts believe Wal-Mart Stores’ recent decision to tie executive bonuses to compliance objectives could be a bellwether for how other large, multinational companies hold management accountable should their firms run afoul of certain regulations.

The retail giant has undergone an overhaul of its compliance operations following a federal investigation into bribery allegations in Mexico last year, and has recently added provisions to its executive incentive compensation program that will tie bonus payments to compliance objectives, according to a proxy statement released on April 22, 2013…

Compliance-based objectives have already been adopted by heavily regulated industries such as financial services and pharmaceuticals, but are rarely seen in other American industries, says Alan Johnson, a financial services comp expert and managing director of Johnson Associates.

Johnson says that it could be difficult to be very specific and objective toward exact compliance standards and goals, as many of the regulation and compliance issues could be seen as politically motivated.

May 13, 2013

Lots of companies talk about making compliance and ethics a priority. Walmart is putting its money where its mouth is.

The retail giant announced last month that it will soon begin basing a portion of compensation for top executives, including CEO Michael Duke, on the company’s ability to meet compliance goals. If top executives don’t meet compliance objectives, they risk having their annual bonuses reduced…

By adopting incentives to meet compliance goals, rather than penalties for compliance infractions, Walmart is ahead of the curve. “Most executive compensation or bonus plans will have subjective elements,” says Alan Johnson, managing director of Johnson Associates, an executive pay consulting firm based in New York City. “There will be wording in there that you have to comply with laws and regulations, but it has always been more about after the fact—after there is a problem—instead of upfront and proactive. Compliance should be holistic, not just following the rules, but going beyond the rules and avoiding problems.”

Compliance Week / May 7, 2013

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What’s the difference between a media mogul and a chief executive elsewhere in the business world? About $10 million in compensation, give or take.  Leaders in other industries may be well paid, but as the accompanying chart shows, they earn far less than their media counterparts.

Consider: the top 20 companies in the United States ranked by market capitalization include no media companies. But according to figures assembled for The New York Times by Equilar, which compiles data on executive compensation, media companies employ seven of the top 20 highest paid chief executives.

The New York Times / May 7, 2013

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As investment consultants and managers launch outsourced CIO (OCIO) services to meet institutions’ demands, consultant relations professionals who woo consultants on behalf of managers have been left with a very different job description.

Consultant relations professionals, who once had the sole objective of servicing investment consultants in the hopes of winning business from their institutional clients, now find themselves in a role more similar to that of an institutional sales professional, either selling their own OCIO services to consultants or hoping to land a spot on an investment consulting firm’s OCIO platform…

Compensation expert Alan Johnson, managing director of Johnson Associates, says that complications and additional responsibilities brought on by the surge in OCIO demand has actually frustrated some consultant relations professionals who feel they aren’t being compensated for the increased assets they’re bringing to their firms as a result of OCIO sales. But if they can find a way of tracking their contribution, he says there may be more room for discussion over their future pay packages – as well as their recognition at their firms.

“Many consultant relations professionals would like a commission but in that [OCIO] world it’s harder to do,” Johnson says. “You work for a very long time to get results and when results do come, it’s hard to quantify they are do. It’s more of a base [salary] and bonus structure. If that really takes hold and brings in a lot of revenue, it will be easier to track. It will lead to more of a commission kind of approach.”

April 16, 2013

RELAX. Sit back. And forget, for a moment, those pesky shareholders and bothersome boards, the regulations, the investigations and all the other headaches of being a chief executive today.

Dodd-Frank rules? Securities and Exchange Commission lawyers? Leave them behind. And let yourself sink into the buttery leather seat of your corporate jet as it soars through the clouds.

That’s what Steve Wynn did. As chief executive of Wynn Resorts, he sat back and enjoyed more than a million dollars’ worth of personal travel last year on his company’s private jet.

The New York Times / April 8, 2013

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A proposed European Union cap on managers’ bonuses is likely to hit U.S.-based staff at institutional asset managers, experts say, regardless of whether those managers have E.U. arms.

Salaries at asset managers may be subject to greater scrutiny, with compensation deferred over longer periods and fiercer competition for jobs, as E.U. asset manager staff flee to the U.S. and U.S. managers are pressured to ensure parity between their U.S. and E.U. pay practices…

The rules are not yet confirmed, and serve a starting point for future negotiations. The legislative package is expected to pass through European Parliament in mid-April. But uncertainty for the future concerns many, particularly considering this latest move was unpredicted. “This is just mean spirited. This is just pitchfork and flares,” says Alan Johnson, managing director of compensation specialist Johnson Associates. “If they’re willing to do this, what’s next?”

March 26, 2013

The European Union appears well on its way implementing strict caps on banker bonuses, with finance chiefs for 26 of the 27 EU nations backing the proposed rules. The caps have ruffled many a feather on both sides of the pond, as the rules also apply to Americans working for EU banks as well as the U.S. units of European banks.

With the caps already set to affect bankers living on American soil, speculation has arisen that the U.S. could eventually consider similar regulations. We asked Alan Johnson, founder of compensation-consultant firm Johnson Associates Inc., about those chances. He also provides his thoughts on the politics behind the proposed EU regulations.

With the EU pushing forward with bonus caps, do you expect the U.S. to follow suit?

I don’t think so. U.S. regulators found out up close and personal how difficult it was to impose pay restrictions included in TARP. Plus, it goes counter to banks trying to be less risky. Anything that encourages larger salaries is just plain dumb.

… continued

eFinancialCareers / March 6, 2013

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Manning & Napier, an asset manager with $45 billion under management, has devised an unorthodox way of compensating its analysts, penalizing them for selections that cause underperformance in client portfolios and carrying these penalties forward into future years. It says the method more closely links analyst goals with institutional investors, but experts disagree…

“It is very demotivating to carry baggage into the future, particularly as an analyst, as you gave the recommendation but you didn’t buy it,” adds Alan Johnson, managing director of compensation expert Johnson Associates.

However, the analysts are also rewarded for how successfully they pitch these ideas to portfolio managers for inclusion in client strategies, how well the company performs and qualitative measures, such as communication and team work. It is hard to measure not only the investment side but also the benefits of an analyst’s negative recommendations, or how much an analyst saved by not recommending a certain stock, says Johnson. “It’s always imperfect how to measure, although firms try very hard,” he adds.

March 6, 2013

Morgan Stanley’s reported move to defer 100% of 2012 bonuses for high-earning employees is the crescendo of a trend of big banks deferring more pay in recent years. It’s the second straight year of big deferrals at Morgan Stanley, which a year ago held back 75% of bonuses for traders, investment bankers, and other high earners after having been at the 40% level the previous two years…

Another, perhaps equal motivation is that shareholders, regulators, and commentators all like it when banks defer bonuses, says Alan Johnson of Johnson Associates, a compensation consulting firm specializing in the financial-services sector…

Morgan Stanley employees are reportedly unhappy with the 100% deferral. Adept communication is the key to avoiding such a reaction, says Johnson. Banks deferring a large portion of bonus pay, with much of the compensation to come in the form of stock, should point out to employees that the deferral actually gives them a chance to make a lot more money, he counsels.

CFO / January 16, 2013

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U.S. companies may be paying out big dividends before tax rates rise next year, but for now they’re holding the line with executive bonuses. “Politically it would be a disaster,” said Alan Johnson, CEO of Johnson Associates.

CNBC / November 29, 2012

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Wall Street bonuses are no longer plummeting, although the “new normal” emerging now is below the industry’s pre-recession heyday. “The revenues of these firms just aren’t good enough. There’s a pretty good alignment between pay and performance,” said Alan Johnson, managing director at consulting firm Johnson Associates Inc.

NBC News / November 12, 2012

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Wall Street workers, whose bonuses and year-end incentives fell by as much as 30% last year, will see slightly bigger bonuses and stock awards in 2012.

“The recovery in financial services continues to be a struggle, and while incentives will be modestly up, few professionals will have reason to cheer,” says Alan Johnson, managing director of Johnson Associates. “The bonus season will be rightfully subdued.”

But given that bonuses were slashed by as much as 30% in 2011, even flat to slightly higher bonuses “is notable” because it signals an ongoing recovery of financial markets, Johnson adds.

USA Today / November 5, 2012

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Wall Street employees, whose paychecks have often been cut in recent years, are likely to get a slight bump in their bonuses this year. The catch: the increase will come on top of one of the worst years for bank pay in recent memory.

Year-end incentives, which include cash bonuses and stock awards, will be flat to up to 10 percent higher when compared with last year, according to a closely watched compensation survey to be released on Monday. But firms drastically cut costs, employment and, as a result, pay, in 2011.

“It has been a slow recovery, just like the economy,” said Alan Johnson, managing director of Johnson Associates, the privately held firm that conducted the survey. “Following a year when year-end incentives declined by as much as 30 percent, the fact that many firms are able to keep this year’s bonuses flat or slightly larger is notable.”

CNBC / November 4, 2012

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Wall Street pay will bounce in 2012 from last year’s sharply reduced levels, but bonuses will be lower and have more strings attached than before the financial crisis, the latest tally of finance-industry compensation shows.

So-called incentive-based pay, which includes cash and stock awards, is set to climb 5% to 10% from a year earlier, according to a forecast set to be released Monday by consulting firm Johnson Associates. At the same time, financial firms are keeping a lid on cash outlays by deferring more pay and trimming their workforces.

“We are as low as we have been in 10 or 15 years,” said Alan Johnson, managing director of Johnson Associates, referring to Wall Street’s bonus pool. “It’s the new normal.”  Mr. Johnson said an equity trader who is managing director at a major firm could receive as much as 70% of his pay at a later date, an arrangement that ties more compensation to long-term performance.

Reflecting a big rebound from last year’s plunge, the survey said bond traders—among the hardest hit in terms of pay in 2011—could see their bonuses rise 10% to 20%, even though several firms are scaling back fixed-income trading operations.

The Wall Street Journal / November 4, 2012

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J.P. Morgan Chase & Co.’s third-quarter results highlight a Wall Street juggling act: how to contain costs amid soft growth and volatile markets without losing highly paid, sought-after workers.

The New York company’s investment bank showed a 12% rise in compensation expense in the period ended Sept. 30, to $2.07 billion, while headcount in the unit fell by 3% from a year earlier to 25,884…

The average salary paid to New York City securities-industry employees continues to climb, reaching $362,950 in 2011, according to the report. But Alan Johnson, managing director of Johnson Associates, a compensation consulting firm, said pay is rising primarily because financial firms have been aggressively cutting costs.

“If the banks hadn’t gotten rid of people, compensation would be flat,” Mr. Johnson said. He expects 2012 Wall Street pay to rise 5% from a year earlier.

The Wall Street Journal / October 12, 2012

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Almost half of Wall Street employees expect their year-end bonuses to be higher this year than they were a year ago, according to an eFinancialCareers.com survey.

Bloomberg / October 8, 2012

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On Wall Street, sometimes the bottom shapes the top. Consider J.P. Morgan Chase & Co. (US:JPM) . On Friday, reports surfaced that two more executives, Irene Tse, one of the executives in charge of trading and Barry Zubrow, the bank’s regulatory affairs chief, will step down in the wake of the “London whale” trading scandal…

Wall Street’s job market remains down about 50,000 jobs from its peak of 860,000 in late 2007. So, the prospect of more job cuts and smaller bonuses comes in an already deflated market.

Bonuses are expected to be flat, according to the latest survey by compensation consultant Johnson Associates. The exception will be traders who will see gains of 5% to 20% from 2012.

MarketWatch / October 5, 2012

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It’s a little hard to look at Wall Street without cringing these days. The nation’s richest financiers have been moping around midtown east like Eeyore, despondent about their stock prices, their return-on-equity figures, and the fact that the president won’t read their grandkids’ poetry manuscripts…

Yes, there have been layoffs at financial firms. Lots of them. And yes, nobody’s making as much as they did in ‘06. But for the bankers who remain employed, life is pretty good. Bonuses are recovering from their post-crisis lows, according to industry compensation guru Alan Johnson, and rising share prices are making those stock options you got in ‘09 and ‘10 look mighty attractive. Lots of financiers are still paying sub-20-percent tax rates, and it’s even possible to receive a bonus if you preside over a struggling bank and take a giant writedown on a major asset! Long story short, you don’t have to be buying apartments in 740 Park to realize that the worst is probably over.

New York Magazine / October 4, 2012

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Morgan Stanley became the latest bank to announce more layoffs to shrink expenses as Wall Street prepares for an extended period of weak global economic growth and low trading and dealmaking volumes…

Rivals including Goldman Sachs Group Inc, Bank of America Corp, and Deutsche Bank AG are also embarking on fresh rounds of staff cuts in their trading and underwriting businesses. Goldman expanded its cost-saving target by $500 million as the outlook has dimmed for near-term revenue growth.

“People have gotten more aggressive on containing costs than they had been a month or two ago,” said Alan Johnson, a Wall Street compensation consultant. “You look out into the future and it just doesn’t look like it’s going to get better any time soon.”

Reuters / July 19, 2012

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Wall Street bankers are bracing for another round of job cuts as a downturn in the global economy cuts into earnings from dealmaking, capital raising and lending…

“If things don’t get better, then I would expect staffing levels to come down for sure,” said Alan Johnson, chief executive of Wall Street compensation consulting firm Johnson Associates, who estimated that banks may cut another 5 percent of their workforce by year’s end.

“When banks do that reassessment, it will go beyond just the short-term economics. They’ll be asking, ‘Where is the global economy going? And is there going to be a recovery, or more of a struggle than a recovery?’”

Reuters / June 5, 2012

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New projections call for moderate 2012 bonus increases across all financial services sectors, with fixed income showing some of the largest potential incentive-pay gains—as much as 25 percent in some cases.

May 17, 2012

Wall Street is getting its first high-profile opportunity to prove it is serious about recovering pay from executives whose blunders waste shareholder treasure.

J.P. Morgan ChaseJPM +0.69% & Co., the nation’s biggest bank by assets, is expected to try to claw back some of the pay it awarded to executives and traders at the unit at the center of a trading debacle that has cost it more than $2 billion. Clawbacks at the unit, known as the Chief Investment Office, are “likely,” a person close to the bank has said…

Companies previously have occasionally invoked clawbacks, largely for clear-cut wrongdoing such as rogue trading or financial restatements. But data on bank-clawback efforts are scarce, and a case involving trading losses that may have stemmed from management-approved strategies could be a tricky proposition.

“This will be a precedent-setting case,” said Alan Johnson, the founder of Johnson Associates Inc., a New York-based compensation firm. “Everyone is watching this closely.”

The Wall Street Journal / May 17, 2012

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Big banks are expected to use a larger portion of profits for employee bonuses this year, despite extensive job cuts and a recent outcry from shareholders over excessive pay, according to a closely watched survey of Wall Street compensation…

Johnson Associates said 2012 bonuses are expected to be constrained for top executives whose compensation packages are detailed in proxy filings due to “public optics” and regulatory pressures. In recent years, banks have introduced clawback provisions, more stock awards and deferred pay to align employees’ risk taking with companies’ long-term welfare.

Johnson Associates projects that employees in fixed-income trading businesses are likely to see the biggest bonus increases, in a range of 15 to 25 percent, thanks to improvements in bond markets. Employees who work in interest-rate products are likely to see the biggest bonus gains, according to the report.

Reuters / May 16, 2012

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Bonus payouts by traditional and alternative money management firms look set to rise “moderately” in 2012, as market appreciation makes up somewhat for stagnant net flows, according to a report Wednesday by compensation consulting firm Johnson Associates.

In a telephone interview, Alan M. Johnson, managing director, called the environment for money management firms so far this year “mildly positive” but “fragile.”

Pensions & Investments / May 16, 2012

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Jamie Dimon, awarded $23 million for running JPMorgan Chase & Co. (JPM) last year, earned 67 times the average amount set aside for his investment bankers and traders, the widest gap among firms that report divisional pay.

Bloomberg / April 16, 2012

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Shareholders sent a message to Citigroup Inc. this week when they voted against hefty pay packages for its CEO and other top executives.

April 12, 2012

The take-home pay of U.S. chief executives grew at least 10 percent in 2011, propelled largely by a stock market rally, according to consultants’ estimates.

Reuters / April 2, 2012

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Goldman Sachs Group Inc. credit traders Matthew Knopman and Philip Ha are leaving for hedge funds after the fifth-biggest U.S. bank by assets cut jobs and pay last year.

Bloomberg / March 26, 2012

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Wall Street bonuses hit bottom and are poised to rebound about 20 percent this year as markets improve, according to Alan Johnson, president and founder of compensation consulting company Johnson Associates Inc.

“The major wall street firms have cut enough of their costs that it doesn’t take much in the way of increased revenue to generate significant profits or pay,” Johnson said in a telephone interview today.  “A percentage increase off a smaller number still isn’t a huge number.”

Bloomberg / March 18, 2012

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Every year since the 2008 crisis, investment bankers at many of the large global banks have seen less and less of their bonuses in up-front cash and more in deferred stock and staggered cash payouts pushed out to two to three years down the road. During the 2011 bonus season, banks including Morgan Stanley, Barclays plc and Deutsche Bank AG have employed even stricter deferral policies, reportedly enacting up-front cash caps on bonuses of $125,000, £65,000 ($103,000) and $265,000, respectively.

The Deal / March 12, 2012

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MBIA did not award bonuses to its top executives in 2011, but only after its regulator pressured the beleaguered bond insurer to withhold the payouts, people briefed on the matter said.

The New York Times / March 12, 2012

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UBS (UBS) on Tuesday became the first investment bank to announce a major “clawback” of bonuses after a rogue trading scandal at the Swiss bank last year led to deep losses.

Given the intense regulatory and political pressure on banks to rein in hefty bonuses that encourage excessive risk taking — as well as what is undeniably a difficult operating trading environment — will clawbacks soon become a common reality on Wall Street?

Compensation experts like Alan Johnson at Johnson Associates, a compensation consulting firm, are not so sure.

“Most decisions are not made by an individual but by a group of people,” said Johnson in an earlier interview with TheStreet on the issue. “The danger is that clawbacks may not be done in a fair way. That is, done in a discriminatory, arbitrary and unfair basis.”

Forbes / February 10, 2012

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NEW YORK (Dow Jones)–Goldman Sachs Group Inc. (GS) paid its employees an average of $367,057 for 2011, a decline of 15% from a year ago, reflecting the tough times experienced by banks and securities firms since last spring.
The investment bank, known for rewarding its bankers and traders with the highest payouts among Wall Street investment banks, set aside $12.2 billion for compensation and benefits for the full year, down 21% from the $15.4 billion it allocated a year earlier. Last year, Goldman paid employees an average of $430,700…

“Most of us had been anticipating a bad fourth quarter for Wall Street and [the banks] definitely came through with that,” said Alan Johnson, managing director of Johnson Associates, whose firm publishes a widely watched compensation survey.  Johnson said that while compensation disclosures so far have reflected lower payouts, they don’t necessarily tell the full story.

“Compensation is down a lot for most, even though it doesn’t look like it,” he said, referring to previous stock awards which are included in the current figures and tend to somewhat cloud results.

Dow Jones / January 18, 2012

When asked about his job at cocktail parties, Alan Johnson has a curiosity-piquing line.“You know those big paydays on Wall Street?” he says, typically waiting a beat to deliver the punch line. “I have something to do with them.”

…as one of the nation’s foremost financial compensation specialists, Mr. Johnson is among a small group of behind-the-scenes information brokers who help determine how Wall Street firms distribute billions of dollars to their workers.

“The misunderstanding many people have about this industry is that pay is whimsical,” Mr. Johnson said in a recent interview at his company’s Manhattan office. “It’s not.”

The New York Times / January 16, 2012

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