Revealed: The Difference in Pay at US and European Banks

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


Money Managers Face Reduced Margins in 2019

“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


Money Managers See Higher Bonuses This Year but Are Bracing for Job Cuts in 2019

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


Big Banks Are Moving Regulators Out of New York City

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


The Price of a Bad Year for Money Managers: Fewer Jobs, Less Pay in 2019

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


Why Wall Street’s Fat Bonuses May Hit a Snag in 2019

“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