November 28 2007: 9:10 AM EST
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Bonus shakeup on Wall Street

This bonus season, investment banks are doling out golden handcuffs. Fortune's Katie Benner reports.

By Katie Benner, Fortune writer-reporter


(Fortune Magazine) -- Despite the recent string of high-profile blowups, top investment banks still plan on doling out bonuses this year - albeit in a slightly reshuffled hierarchy.

Winners like commodities and equity derivatives traders can expect 10% to 15% above last year's figures, while losers (think anyone who plied mortgage-backed securities) could see their take shrink by up to 60%.

Either way, bonus pay this year is going to come with a hitch: more stocks, less cash. The bigger the bonus, the more of it will be given in equity, say compensation experts at Armstrong International.

The reason? Banks desperately need to hold on to their people; stock makes it tougher for their stars to take the money and run to, say, Goldman Sachs (Charts, Fortune 500).

In fact, it's Goldman's pool - which accounts for an estimated $20 billion of the top five banks' $36 billion - that Wall Streeters have to thank for their bonuses; what Goldman does others have to follow or risk losing talent.

But will stock shackles be strong enough? With Goldman's pool nearly twice as big as Jamaica's GDP, $1 million in Citi (Charts, Fortune 500) stock might seem like cold comfort compared with warmer climes elsewhere.  To top of page