In The Press

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.

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.

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.

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.

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.

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.

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.

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.

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. See report on Tse and Zubrow’s pending exit.

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.

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.

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.

Wall Street is getting its first high-profile opportunity to prove it is serious about recovering pay from executives whose blunders waste shareholder treasure.

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.

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.

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.

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.

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.

Shareholders sent a message to Citigroup Inc. this week when they voted against hefty pay packages for its CEO and other top executives.

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.

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.

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.

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.

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.

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.”