Wall Street Pay Cuts and Life on Main Street

Wall Street Prepares to Take Sharp Pay Cut

By LIZ RAPPAPORT And COLIN BARR

Pay worries have been mounting up and down Wall Street for months amid lower trading revenue, languid deal-making, new regulations and anxiety about the global economy. Other pressures include weak financial-company stock prices and sour public sentiment that culminated in the Occupy Wall Street encampment in New York.

For many Wall Street executives and staff, the new pay structures and cuts in company perks already have hampered their lifestyles. Instead of large cash payouts each year, bankers now are getting more and more of their own companies' shares. Some cash-strapped employees have sold second homes....

At Goldman, average compensation per employee would fall 10.7% to $385,000 for 2011 from $431,000 in 2010 if the New York company keeps its payout rate steady in the fourth quarter. In 2007, Goldman employees received an average of $661,000 each, and people throughout the firm are bracing for disappointment. For the typical Goldman partner, pay for 2011, including base salary and bonus, is likely to range from $3 million to $6.5 million, according to people familiar with the matter. In better years, payouts have been at least twice as high, these people said.

"Companies definitely have to realize the party as they know it is over," said Rose Marie Orens, a senior partner at Compensation Advisory Partners, a New York firm that works with compensation committees at public-company boards.

—Aaron Lucchetti contributed to this article.

See more at: http://online.wsj.com/article/SB10001424052970204331304577147750253122844.html?mod=googlenews_wsj

Main Street took Pay Cut Years Ago

By LIZA REPORTER and BARRED SCRIBE

Pay worries have been mounting up and down Main Street for 20 years amid lower wages, cut benefits, lobbyists buying politicians, back room deal making, and anxiety about the global economy. Other pressures include weak political leadership, unaffordable medical care and all of these concerns produced the sour public sentiment that culminated in the Occupy Wall Street encampment in New York.

For many middle class workers, the pay structures and cuts in benefits have already hammered their lives. Instead of a small surplus each year, workers are now looking a huge deficits each year. They are sharing nothing from their own companies' profits. Some cash-strapped employees have lost their only homes or gotten loans from their relatives to pay bills, said people familiar with the matter.

On Main Street, average compensation per employee has fallen to approximately 700 dollars a week, as opposed to the Wall Streeters who received a yearly average of $661,000 each.  People throughout the Main Street are well past the disappointment phase and are moving towards anger and frustration. For the typical Main Streeter, real pay for 2011 is likely to lose value again as inflation and high energy and food costs eorde their lives, according to people familiar with the matter. In better years, Main Streeters could actually afford to eat.