More Cuts Coming To Investment Banker Pay (MS, BAC, CS)

First it was news that Morgan Stanley (NYSE: MS) and Bank of America Corporation (NYSE: BAC) were cutting investment banker pay ahead.  Now comes more of the same from Credit Suisse Group (NYSE: CS) and you can just bet that the pay scales will be declining elsewhere if they have not already.  Bloomberg News is reporting that Credit Suisse is cutting pay for senior investment bankers by about 30% in some cases.  The Swiss bank has told senior investment bankers that compensation for 2011 will be down about 30% on average from 2010.

This is not universal nor is it across the board per Bloomberg reports, with Asia pay down for many by about 20% on average.

Firms are using the European sovereign debt woes as part of the ongoing excuse, but much of this pressure is just secular and also the ability of firms to lower pay right now. Higher regulation around risk, trading, underwriting, and even managing deposits is lowering relative pay.

If a few firms are cutting investment banking pay, there is one thing you can count on: ALL LARGE FIRMS WILL BE MAKING PAY CUTS! 

JON C. OGG