🍋 Bonuses Down Bad

Wall Street bonuses fell the most since 2008, college seniors are struggling to find jobs, and Manhattan office vacancy hit a new record.

Together With

“Never agree to anything proposed on someone else's boat or you'll regret it in the morning.” — Michael Lewis

Good Morning! 2023 college graduates are having a harder time finding jobs this year. Companies are pulling back funding on the metaverse, with some companies like Disney dissolving their metaverse divisions. Regional banks are struggling to boost credibility after the SVB crisis, and they’re losing even more deposits to larger banks.

A new study found only about half of Americans are satisfied with their jobs. And Manhattan office vacancy hit a new all-time record this week as new developments are adding even more space in the city.

Want to invest in wine? Today's sponsor Vinovest delivered a return of 11.8% since 2020. Check them out here.

1. Story of the Day: Bonuses Down Bad

Everyone knows investment bankers had a rough 2022. But yesterday we found out just how bad it was. New York State reported official figures yesterday, and the average Wall Street employee’s bonus was $176k. That’s a 26% drop from the previous year, and the sharpest year-over-year decline since the 2008 financial crisis.

2021 was a record year for investment banks, so a decline in bonus payouts was expected. However, the extent of the decline far exceeded expectations, leaving investment bankers reeling. With advising fees, stock offerings, and bond sales all taking a hit, investment banks saw a massive $50 billion in year-over-year revenue wiped out.

To add insult to injury, banks are now forced to lay off employees and offer lackluster bonuses to underperforming employees, hoping they'll quit. Some employees at Goldman Sachs reportedly received bonuses as low as $10k, which is a mere pittance as a percentage of their base salary.

Bonuses aren’t just a luxury - they’re a significant and crucial part of a banker’s income. In high-cost-of-living cities like New York, many young bankers struggle to live off their base salary - they count on their bonus to make ends meet.

And it’s not just employees counting on bonuses - New York State reports that the dwindling bonus pool will result in a loss of $457 million in revenue.

Takeaway: Did the finance industry catch lightning in a bottle in 2021, or was a lackluster 2022 the real anomaly? Experts are still divided but caution bankers to tamper expectations heading into 2023.

Catch the full results of our 2023 comp survey here.

2. Markets Rundown

For access to Wall Street insider interviews, industry deep-dives, premium research/resources and weekly Knowledge Drop newsletter, check out our Insiders membership.

Stocks closed higher as tech stocks retake the lead.

Movers & Shakers

  • (+) Evgo ($EVGO) +22% after the infrastructure company beat Q4 revenue expectations and reported strong growth.

  • (+) Fluence Energy ($FLNC) +15% after Goldman upgraded the company to a BUY.

  • (–) Bed Bath & Beyond ($BBBY) -26% after the company announced a $300 million stock offering, warned it may need to file for bankruptcy.

Private Dealmaking

  • Acko, an Indian fintech and insurtech startup, raised $120 million

  • Raisin, a European savings and investment marketplace, raised $65 million

  • EigenLayer, an Ethereum restaking protocol, raised $50 million 

  • Janus Health, a revenue cycle management company, raised $45 million

  • Fire1, a remote monitoring company for chronic diseases, raised $25 million

  • Rebuy, a marketing platform for online retailers, raised $17 million

A Message from Vinovest: Sip on Long-Term Financial Stability with Vinovest

Investing in wine can be a lucrative way to diversify your portfolio, and Vinovest is here to help.

With a return of 13.1% in 2022 and a cumulative return of 11.8% since 2020, it's clear that Vinovest knows how to manage wine investments. With over $100 million in assets managed on behalf of clients from 44 different countries, they have the expertise and experience to make the most out of your wine investment.

With Vinovest, wine investing is accessible and easy for everyone, whether you're a seasoned investor or just getting started.

Their platform allows you to browse and select from a curated selection of wines, and their team of experts will handle all the logistics, from storage to insurance.

Plus, with real-time portfolio tracking and performance analytics, you can stay informed and in control of your investments.

Sign up today and start your journey toward building a profitable and diversified investment portfolio with wine.

3. Top Reads

  • Workers are largely happy with their jobs - but not their paychecks (YF)

  • Americans aren’t taking all their paid time off from work (Axios)

  • Help me move? I’ll pay you in Instagram likes (WSJ)

  • Do we know how many people are working from home? (NYT)

  • Bitcoin’s correlation with stocks is at its lowest since 2021 (CNBC)

  • The risk of tighter bank lending (Axios)

  • Jamie Dimon reprises 2008 role as rescuer of failing bank (NYT)

  • The influencers getting rich by teaching you how to get rich (Vox)

  • More home sellers are sitting out of the spring housing market (CNBC)

  • SVB’s collapse was a failure of ESG (Axios)

4. Shortform Book of the Day: Burn The Boats

 

From Sun Tzu to Julius Caesar, the ancient Israelites to Ukrainian President Volodymyr Zelensky, there’s a bold and highly effective tactic seen throughout history—when leaders want to motivate their troops for success, they destroy all opportunities for retreat, and go all-in on the mission.

They burn their boats; it’s win or perish, and the clarity of sheer desperation propels them to victory.

Serial entrepreneur, brilliant investor, and television personality Matt Higgins makes the case that burning the boats isn’t just advantageous in times of war or crisis, but a strategy we can all use to achieve our greatest dreams.

Conquerors don’t have a Plan B, knowing intuitively what science bears out: the mere contemplation of a Plan B weakens our resolve and diminishes our chances for breakout success.

In Burn the Boats, Higgins draws from experiences in his own rags-to-riches life to show you how it’s done.

The lessons he’s learned along the way, and witnessed in the leaders around him, are now for the first time distilled down to a template for success that’s available to everyone bold enough to use it.

“The counterintuitive formula for a life of perpetual growth that has been practiced for thousands of years by military leaders and serial entrepreneurs alike.”

Read More Books in Finance, Economics, and More with Shortform

5. Short Squeez Picks

6. Daily Visual: Big Tech Stocks Rebound

YTD performance

Source: Axios

7. Daily Acumen

Sometimes it feels like our focus is our own worst enemy. It's like we're trying to reach the finish line, but our focus turns it into this massive, insurmountable hurdle.

Picture me wanting to go for a long run, but that sneaky little voice in my head is like, "Ninety minutes? Pfft, you're tired, let's just scroll Twitter instead." It's like our focus is holding us back from taking that first step.

But here's the trick: change your focus, and you'll change the game. Instead of staring at that huge gap between now and the finish line, just focus on the next step. It's like turning a mountain into a molehill!

So, remember: Don't focus on writing the next great novel. Focus on writing one good sentence. Don't stress about becoming a health guru. Just whip up a healthy meal tonight. Keep your eyes on the prize, but make sure the prize is the very next step.

8. Memes of the Day

 

 

 

 

Want more Short Squeez?

Become an Insider. You'll get access to:

  1. Industry deep-dives & compelling investment ideas

  2. Wall Street Insider interviews breaking down their investment portfolio, strategy & investment picks

  3. Knowledge Drop - an exclusive alpha-generating newsletter covering the best weekly research & content (podcasts, articles, blogs)

  4. Vault – a collection of investing & recruiting guides, modeling courses, salary / comp data, institutional research (40+ resources added / month)

See you on the Inside.

*****

Looking to start your own newsletter? Beehiiv is Warren Buffett of creator platforms.

*****

What'd you think of today's email?

Login or Subscribe to participate in polls.

Join the conversation

or to participate.