In equity trading, pay was expected to shrink 29 per cent, and the epicentre of the cuts would be in bond trading, which has faced the most upheavals since the credit crisis. Only wealth managers, who act as investment advisers to the very rich, could expect to see their compensation climb overall, by about 8 per cent.
Rising base salaries offered some compensation, but overall pay for the year was expected to be down 27-30 per cent, Options Group found. Except that survey was in November. Now, it looks worse.
"What we are hearing from various places is that things are not a pretty sight," Michael Karp, managing partner at Options Group, told The Independent, moments after getting off the phone with a global head of prime brokerage at one of the banks. "The last quarter was not great, December was not good, so our prediction may have to be ratcheted down a bit.
"It shows the effect of all the new financial regulations and regulatory concerns across the globe. Banks are still working out what the new paradigm is, and if things don't turn a corner by March, everyone essentially has to go back to the drawing board. That could mean another round of headcount reductions, perhaps as much as 10 or 15 per cent."
As well as the ongoing nervousness caused by eurozone turmoil, there has been a wider drop in trading activity that reflects the lessons learned from the credit crisis. "And when it's tough to make money, it is tough to pay your people," Karp says.
After JPMorgan Chase tomorrow, Citigroup and Goldman Sachs follow next week, building up the picture of how much Wall Street has put into its bonus pools.
If bankers are crying into their beer next week, they will find little sympathy among the general public. It may be half what they got before the credit crisis, but the average Goldman partner could still be taking home between $3m and $6.5m ((pounds sterling)1.9m and £4.2m).
The word inside Goldman is that it plans to focus the pain higher up, and some partners in fixed income trading may get no bonuses at all. But even low-ranking junior analysts at some banks are worried about being hit.
Whatever the size of the bonus pie, don't expect it to be apportioned equally. Managers will be making harsh judgments about which employees they most certainly want to retain and which they can risk upsetting.
They may be bolder this year than ever, since the risks of walk-outs is low. Sklover, the employment lawyer, is not expecting to be deluged by unhappy bankers planning to sue over a paltry bonus, as he has been in better years, and is advising his clients instead to try to steer their bonus negotiations to what they promise to achieve for their firm in the coming year.
"Most people think that bonuses are rewards for work done, but that is a fallacy," Sklover says. "They are about retention for the future. Think about it from the employer's side: they already have your work in the bank. They make payments to someone that they want to retain."
Options Group's Karp says the days of outlandish payouts are over. "Superstars always get compensated, but this is a new world. It is not 2006. Even superstars hit their limits, especially because banks don't want to be in the public eye and therefore don't want to overcompensate their people."
