Insider Today: Wall Street's big payday

Plus: Leaked Microsoft presentation, and SEC's X hack.

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January 10, 2024 • 6 min read with Dan DeFrancesco Hello! Forget self-driving cars; This electric vehicle can be steered using a video-game controller. That next-gen concept was on full display at Sony’s exhibit at CES. In today’s big story, we’re looking at when the big US banks are handing out bonuses. What's on deck Markets: The SEC says its X account was compromised, and that bitcoin ETFs have not been approved for trading. Tech: How Microsoft built one of its top generative AI products. Business: Boomers’ lack of retirement savings is going to become their kid’s problem. But first, it’s the most wonderful time of the year. (For Wall Street.)

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Samantha Lee/Insider The big story Here comes the money The long, stressful days working on Wall Street lead many workers to question why they’re in the industry. For many, the answer comes today: bonuses. The 100-hour anxiety-filled workweeks and unrelenting bosses and clients don’t seem so bad once bonus season hits. As an industry insider once told me, it’s much easier to forget about work problems once you see your bonus deposited in your account.  And for good reason. Bonus season is the culmination of a year’s worth of work, as bankers get most of their total comp via bonus. It’s a number that can be eye-poppingly big. We’re talking seven figures without breaking a sweat. Business Insider’s Alex Morrell and Emmalyse Brownstein have a rundown on when all the top US banks plan to start communicating bonuses to employees.  After a record-breaking 2021 bonus season, Wall Street crashed down to Earth, and then some, in 2022. A non-existent M&A and IPO market meant bonuses dropped significantly.  But some firms took a very un-Wall Street approach to last year’s bonuses, subsidizing the lack of revenue in one division across the rest of the firm.  The move was meant to keep dealmakers happy but wasn’t welcomed by those who had a strong year — traders — and were forced to shoulder the losses of their peers. This year also looks tough for investment bankers, thanks to the extension of the M&A drought. Emmalyse has a full breakdown of the bonus outlook for all Wall Street divisions. Samantha Lee/Business Insider Bonus season also signals the kick-off to hiring season on Wall Street.  Even people who are miserable at their jobs won’t change gigs a few months before their bonus lands. But Wall Streeters can start considering their next move once that check clears.  Bonus season is also a good way to get a gut check on one’s standing within a firm. Wall Street’s love language has always been money, and there’s no better way for a boss to show their affection than a bonus that’ll help you buy a beach house.  Meanwhile, a weak bonus is the easiest way to show an employee the door without actually having to fire them.  Investment bankers’ bonuses will be the most interesting to watch. There’s one reason most people get into dealmaking, and it’s not for the love of the game. Bankers expect to be paid well, but another year of lackluster deals makes that harder for banks to do.  Banks want to retain those bankers so they can get to work once M&A picks up, but they also can’t keep handing out big bonuses when the fees they’re bringing in have dried up. Of course, that’s not to say bankers don’t have options. The venture capital world is in the midst of a talent crisis, BI’s Melia Russell reports, which could lead more bankers to follow the well-worn path to VC land.    Read the full story

3 things in

Markets 🔔 Before the opening bell: US stock futures rise early Wednesday. Meanwhile, bitcoin is down following an “unauthorized" SEC announcement. Read more below.  Thos Robinson/Getty Images 1. BlackRock lays off staff. CEO Larry Fink and President Rob Kapito announced in an internal memo on Tuesday that the firm would be cutting 3% of its staff, or about 600 people, citing  significant changes in the investment industry. 2. War over Taiwan could be devastating for the United States. The country’s economy could take a 6.7% hit in the first year of conflict if Washington got involved, and a 3.3% hit if China were to blockade the island. Either way, Bloomberg predicts it would be worse than 2020, when the GDP contracted 2.2% due to the COVID-19 pandemic. 3. No, the SEC has not approved bitcoin ETFs for trading. The SEC says its X account was compromised when it announced the long-awaited approval of spot bitcoin ETFs, sparking immediate chaos.

3 things in

Tech Stephen Brashear/Getty Images 1. Leaked Microsoft presentation: How the company built one of its top generative AI products. Internal audio revealed early development work on Microsoft’s Security Copilot service. An exec said the company had to “cherry pick” examples due to AI hallucinations. 2. Snap CEO proclaims “social media is dead.” Evan Spiegel sent staffers a post-holiday note with an upbeat tone. He predicted that Snap is about to “transcend” the smartphone, while lashing out at rivals for “connecting pedophiles, funding insurrection,” and more. 3. Carta’s “Nasdaq for private markets” came crashing down thanks to a single LinkedIn post. The company shut down its secondary markets product after it was called out on LinkedIn for misusing customer data. Carta’s CEO called the change "my greatest failure and disappointment."

3 things in

Business Alounthong Pornthip/Getty, Klaus Vedfelt/Getty, artpartner-images/Getty, Tyler Le/BI 1. Boomers haven’t saved enough for retirement — and their kids are going to pay the price. Fewer than half of all boomers have saved enough for retirement. That means more government spending will be allocated to older folks and economic growth could slow. 2. Billionaires are still having a hard time figuring out how to save newspapers. Top editor Kevin Merida’s departure from the Los Angeles Times highlights this. And you can catch the money-losing vibe by reading between the lines of billionaire owner Patrick Soon-Shiong’s staff memo. 3. Exclusive: Sequoia Capital distributed $10 billion to its investors in 2023. Sequoia did this even as it faced steep markdowns last year. The venture firm told its limited partners in a letter last week that it distributed over $42 billion to its investors over the past five years.

In other news Tim Cook wants you to call the Apple Vision Pro “spatial computing.” But what's that? Home prices are surging in these 20 cities — including six with median prices under $240,000 — as buyers rush to snap up properties at faster rates than the rest of the country. Ukrainian soldier describes his “1 in 1,000” escape from one of the most hellish battles of the war. Linda Yaccarino is (sort of) getting her way at X. Some people are getting $92 checks from Apple over the iPhone “batterygate” scandal. I left Texas and moved to Spain. Life is so good here I can’t ever imagine living in the US again. Almost a third of employees say their boss being in the office makes them avoid coming in, a survey found. Microsoft’s $10 billion partnership with OpenAI faces possible probe by EU watchdog. Why companies like Amazon, Walmart, and Target will let you keep some products you want to return — but issue you a refund anyway.

What's happening today CNN is hosting a Republican presidential primary debate. It’ll be moderated by anchors Jake Tapper and Dana Bash. Happy birthday, George Foreman. Pat Benatar, Frank Sinatra Jr., Rod Stewart, and Jared Kushner were also born on this day. Earnings today: Aritzia, Bang & Olufsen, and other companies.

Talia Lakritz/Business Insider For your bookmarks Midwest vs. NYC Costco The most surprising differences between a Costco in the Midwest and New York City. The prices and offerings were mostly identical, though the food courts had different sodas.

The Insider Today team Dan DeFrancesco, deputy editor and anchor, in New York. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Jordan Parker Erb, editor, in New York. Hayley Hudson, director, in Edinburgh. Lisa Ryan, executive editor, in New York. Get in touch insidertoday@insider.com To read unlimited articles, subscribe to Business Insider. Download the Insider app Email sent to: mrkay@idiot.cloudns.cc Manage your email preferences | Unsubscribe | Terms of service | Privacy policy | Advertise with us © 2024 Insider Inc. 1 Liberty Plaza, New York, NY 10006