Pressure grows for bank execs to forgo bonuses

Though it's unusual for Wall Street executives to turn down bonuses, it has happened before. Morgan Stanley CEO John Mack took no bonus last year. A company spokesman said no decision has been made for this year.

Even if top executives give up bonuses, that won't mean the end of eye-popping Wall Street paydays this year or next. Though some top executives may "humble themselves" and take little or no bonus, Johnson said "thousands of other people will get paid millions."

"There won't be a lot eight-figure bonuses, but there's going to be lots of sevens," Johnson said.

A major reason is that firms that don't pay bonuses risk losing high-performing workers. These workers count on their bonuses to pay mortgage bills and other expenses.

Despite the credit crisis, "you're going to find pockets of these companies that are doing very well, and those people are going to get a bonus," said David Schmidt, a senior consultant on executive pay at James F. Reda & Associates in New York. "If they don't get paid, they're going to be angry, and they're going to leave" for smaller, more specialized firms or other professions entirely.

Fear of losing top employees goes beyond Wall Street. Troubled insurer American International Group Inc., which is receiving around $150 billion in bailout money, said Friday it will pay about $500 million in deferred compensation to employees and independent agents.

The money represents earned income, not bonuses, and is intended to encourage employees whose savings were wiped out from abandoning the firm, AIG spokesman Joe Norton said.

Still, Norton acknowledged, there's "nothing" to stop employees from taking the money and then quitting.

"It's a risk we're willing to take. It's their money," he said.

Companies usually make decisions about bonuses in December and make payments in January. Workers who do get bonuses will almost certainly receive much less than they did last year.

Millions may have to repay part of tax credit Some 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit. Obama administration faults Senate bank bill Warren Buffett: Financial panic is over Pay czar concerned firms could lose talent U.S. banks to prepay $45 billion to FDIC

No decision has been made on the size of bonuses to be paid to Goldman employees, DuVally said. That will depend on the company's year-end performance and on how much money is allocated to the employee-compensation pool, he said.

Whatever companies pay to midlevel employees, much of it will be distributed under the radar. Unlike bonuses for top executives, those paid to midlevel employees don't have to be disclosed in public filings.

"It's only the people at the very top who have to say what they're getting" in bonuses, said Mark Borges, a principal with Compensia Inc., a Northern California compensation consulting firm. "The real largesse of these arrangements has really gone unnoticed."

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