Higher Bonuses in Lean Times

HIGHER BONUSES IN LEAN TIMES  |  Wall Street employees may find it hard to celebrate at bonus time this year. While year-end incentives are expected to be slightly higher, “the increase will come on top of one of the worst years for bank pay in recent memory,” DealBook's Susanne Craig reports.

Bonuses are likely to be flat to up to 10 percent higher, according to a compensation survey by Johnson Associates to be released on Monday, Ms. Craig reports. Fixed-income traders, whose bonuses dropped the most in 2011, are expected to see the biggest gain this year. Top executives, like Lloyd C. Blankfein of Goldman Sachs, are projected to take in roughly what they did last year. But the broader context is one of retrenching. “Following a year when year-end incentives declined by as much as 30 percent, the fact that many firms are able to keep this year's bonuses f lat or slightly larger is notable,” said Alan Johnson, managing director of Johnson Associates.

At Goldman, the cutbacks can be seen in the list of partners, who are paid from a special compensation pool. The firm said in a filing on Friday that its class of partners numbered 407, down by 31 from earlier this year, Bloomberg News reports. Reuters notes that the firm named fewer partners “because of a broad decline in Goldman's staff levels.”

 

WALL STREET AFTER THE STORM  |  As large sections of New York and New Jersey still lack basic essentials, some on Wall Street are looking to help out. Goldman Sachs and its employees are donating $5 million to aid the recovery from Hurricane Sandy, and the firm plans to offer $5 million of loans to small businesses affected by the storm. Goldman, which protected its headquarters with sandbags and managed to keep its lights on as others lost power, may be feeling slightly defensive. “I'm not going to take it that someone is going to scorn us for doing what we did,” Mr. Blankfein said at an event late last week, according to New York magazine. “We worked hard and did sensible things. And by the way, having done that, it put us in a position to help other people in the neighborhood.”

Henry Kravis of K.K.R. is hoping to strengthen the city's infrastructure with a $35 million fund, Bloomberg News reports. And a hedge fund manager from the Upper West Side, Roy Niederhoffer, was among volunteers who turned out over the weekend. “I really don't think it's the government's job to take care of all this,” he told The New York Times.

 

ON THE AGENDA  |  Tesla Motors, Humana, True Religion and Time Warner Cable report earnings before the opening bell. The Library Lions gala at the New York Publ ic Library, which was set for Monday evening, has been canceled because of the storm. Robert Wolf, the former UBS executive who runs 32 Advisors, is on CNBC at 4:30 p.m.

 

WHAT'S MISSING FROM THE POLITICAL DEBATE  |  Amid the election campaigning, some important issues still have not been adequately addressed. For one, it is not easy to determine exactly how taxes might change, regardless of which candidate wins, James B. Stewart writes in his New York Times column. After some calculations, Mr. Stewart concludes that his own rate under Mr. Obama would be lower than that paid by the ultrarich, but under Mitt Romney it would be higher. The candidates also have spent relatively little time discussing financial regulation. Gretchen Morgenson writes in her New York Times column that “neither President Obama nor Mitt Romney has really addressed one of the nation's most pressing eco nomic issues: the risk that one day taxpayers might have to bail out swashbuckling financial institutions again.”

 

HSBC'S LEGAL WOES  |  The fallout continues from a money laundering scandal involving HSBC. The bank said on Monday that it had set aside an additional $800 million to cover potential fines, settlements and other expenses related to the investigation, bringing the total earmarked amount to $1.5 billion. The matter could result in corporate criminal and civil charges, in addition to fines against the bank, HSBC said. HSBC's third-quarter profit fell about 50 percent, to $2.8 billion, affected by the new provisions.

 

 

 

Mergers & Acquisitions '

MetLife Agrees to Sell Mortgage Portfolio to JPMorg an  |  MetLife is selling its mortgage servicing business, consisting of a portfolio worth about $70 billion, as it looks to end its status as a bank holding company. BLOOMBERG NEWS

 

Canada Extends Deadline to Review Cnooc-Nexen Deal  |  The deadline is now Dec. 10, Reuters reports. REUTERS

 

Lloyds Bank Said to Weigh Selling Stake in Wealth Manager  |  The Lloyds Banking Group may sell its 60 percent stake in St James's Place, a wealth manager, to raise about $1.6 billion, the Sunday Times reported, according to Reuters. REUTERS

 

INVESTMENT BANKING '

UBS Revamps Its Investment Bank  |  Only days after the Swiss bank UBS announced 10,000 job cuts as part of a major overhaul, it has begun to reorganize its investment banking unit, according to an internal memorandum reviewed by DealBook. DealBook '

 

Bank of America Prepares to Pay Shareholders  |  Bank of America last week “received a reprieve when regulators determined it would not have to hold as large a cushion of equity as expected, a ruling which could hasten the return of capital,” The Financial Times writes. FINANCIAL TIMES

 

Rochdale Says Trading in Apple Led It to Seek Help  |  Daniel Crowley, the president of Rochdale Securities, said: “Rochdale ha d an unauthorized trade that left us with a negative capital position. We are in talks that would result in a healthy balance sheet, and we expect to be trading maybe as early as Monday.” WALL STREET JOURNAL

 

Berkshire Hathaway Profit Rises 72%  |  Berkshire Hathaway, run by Warren E. Buffett, reported higher profit as “a stock market rally helped improve results in the derivatives book and earnings at the railroad climbed,” Bloomberg News reports. BLOOMBERG NEWS

 

Mutual Funds Run by Facebook's Underwriters Sold Early  |  Funds managed by Morgan Stanley, JPMorgan Chase and Wells Fargo were “among the first out the door when the social network giant's stock began tanking,” The Wall Street Journal reports. WALL STREET JOURNAL

 

PRIVATE EQUITY '

Four Seasons Hotel Said to Get $900 Million Offer  | 
WALL STREET JOURNAL

 

Bid for KFC Franchisees in Malaysia Moves Forward  |  Shareholders of KFC Holdings in Malaysia voted in favor of a $1.7 billion bid by a group that includes CVC Capital Partners, Reuters reports. REUTERS

 

HEDGE FUNDS '

Smaller Hedge Funds Shut Down  |  The Financial Times reports: “A rising number of small hedge funds are shutting their doors, with houses run by former inv estment bank proprietary traders being particularly badly hit by rising costs and difficulty in attracting assets.” FINANCIAL TIMES

 

How Will Elliott's Victory Against Argentina Affect Creditors?  |  The Financial Times reports: “Money managers, lawyers and intergovernmental organizations are scrambling to understand the ramifications of an unexpected legal victory by the hedge fund Elliott Associates against the state of Argentina.” FINANCIAL TIMES

 

Brevan Howard Hires a Goldman Trader  |  Wayne Leslie, who ran European investment-grade trading at Goldman Sachs, is headed to Brevan Howard Asset Management in London, Bloomberg News reports, citing an unidentified person with knowledge of the matter. BLOOMBERG NEWS

 

I.P.O./OFFERINGS '

S.E.C. Turned Up the Pressure on Groupon  |  This summer, the Securities and Exchange Commission began asking Groupon to reveal more information about its revenue from new businesses, after the company revised its 2011 results, according to documents recently made public. WALL STREET JOURNAL  |  BLOOMBERG NEWS

 

Restoration Hardware Jumps in Market Debut  |  Shares in Restoration Hardware opened up at $32.28, more than 35 percent higher than their initial offer price, as investor appetite for the stock appeared undiminished by the storm-shortened week. DealB ook '

 

Potbelly Sandwich Shop Said to Plan an I.P.O.  |  The Potbelly Sandwich Shop chain has hired Goldman Sachs and Bank of America for a potential I.P.O. next year, Reuters reports, citing unidentified people familiar with the matter. REUTERS

 

VENTURE CAPITAL '

HubSpot Attracts $35 Million  |  HubSpot, a start-up that focuses on social media marketing, raised $35 million for international growth and acquisitions, AllThingsD reports. ALLTHINGSD

 

How Smaller Web Sites Depend on Google  | 
NEW YORK TIMES

 

A Review of ‘Start-Ups: Silicon Valley'  |  “The real geeks of Mountain View and Menlo Park are smart enough to know that reality is the last thing to expect from a Bravo reality show,” writes Mike Hale in The New York Times. NEW YORK TIMES

 

LEGAL/REGULATORY '

Reading the Fine Print in Abacus and Other Soured Deals  |  Many of the soured investment products that helped lead to the financial crisis contained disclosures of their risks, but the investors failed to heed warning signs, Steven M. Davidoff writes in the Deal Professor column. Deal Professor '

 

Goldman Sachs Challenges Class-Action Lawsuit   |  Goldman Sachs urged the United States Supreme Court “to throw out a mortgage securities class-action lawsuit that it said could cost Wall Street tens of billions of dollars,” Reuters reports. REUTERS

 

In Australia, S.&P. Found to Have Misled Investors  |  An Australian judge ruled that Standard & Poor's misled investors by bestowing a high rating on a product created by ABN Amro that later collapsed, “a landmark case that paves the way for legal action in Europe,” The Financial Times reports. FINANCIAL TIMES

 

Fallen Billionaire in Ireland Is Jailed  |  Sean Quinn of Ireland became “the first major player jailed in connection with the country's economic collapse, having come to personif y its boom and bust,” Reuters writes. REUTERS

 

Nomura Faces Another Insider Trading Case  |  On Friday, the Japanese bank Nomura said it would probably be involved in a new insider trading case, months after the firm's chief executive, Kenichi Watanabe, resigned following similar accusations. DealBook '

 

Officials at G-20 Meeting Warn on Debt  |  Though there was talk of Europe's crisis and the federal deficit of the United States, “the meeting of the largest industrial and emerging economies was not expected to produce any major agreement,” The New York Times reports. NEW YORK TIMES