Filed under: Management, Citigroup Inc. (C), Merrill Lynch (MER), Goldman Sachs Group (GS), Bear Stearns Cos (BSC)

I’ve looked through the archives of the New York Times back through 1981 and I can’t find a period when Wall Street CEOs decided not to take a bonus. But that’s what’s happening today, as Bear Stearns Companies (NYSE: BSC) James Cayne and other top execs and Morgan Stanley Inc. (NYSE: MS) CEO John Mack are foregoing bonuses for 2007. The only exception is that in 2003, Citigroup Inc. (NYSE: C)’s then-CEO Sanford Weill took his bonus in options on 1.5 million shares of Citigroup stock instead of cash after Citigroup paid $300 million in fines. But Cayne and Mack are getting no bonus, period.

Why are they doing this? Because it’s going to make it easier for them to stiff lots of employees who they don’t think will be essential to making a profit in 2008 and 2009. Investment banks have less bonus money to go around and they will try hard to pay enough to their top performers to keep them from jumping ship. If they can keep these top performers around, then they will be able to reap the rewards in the future. In the meantime, those no-bonus CEOs will need to make do with the hundreds of millions they’ve gotten in the last few years.

Meanwhile, my brief stroll through Wall Street’s recent history reveals previous periods of bonus pain — none as bad as 2007 though. Not surprisingly, these bonus cuts happened in years when Wall Street got in trouble: 1987, and 1994 to name a couple. Here are some details.

Continue reading Wall Street sets new precedent: CEOs skip bonuses

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This entry was posted on Wednesday, December 19th, 2007 at 4:59 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.