[ by Melanie Gretchen ]

Wall Street continues to carry on  – and more amid a struggling economy and evolving industry.

Despite cuts to costs, employment and pay in 2011 – and increased scrutiny following new regulation and million-dollar lawsuits – things are set to turn around on Wall Street.  Year-end incentives, which include cash bonuses and stock awards, will be flat to up to 10% higher when compared with last year, according to a compensation survey to be released on Monday.

Johnson Associates, based in New York, surveyed 10 public asset management firms, 8 major banks, and more than a dozen other financial institutions.  Amid falling revenue, firms are also facing regulations that are forcing them to sell off certain segments, or at least cut back, like proprietary trading, or trading for their own accounts, according to Roy Smith, a professor of finance at New York University: "They are cutting back as much as they can get away with."

"It has been a slow recovery, just like the economy. 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 flat or slightly larger is notable." -- Alan Johnson, managing director of Johnson Associates, the privately held firm that conducted the survey.

The Upside. Conservative spending, however, may indeed pay off.  Already, executives and boards are thinking toward who will make what, considering top executives can receive a range of from $100,000 to more than $1 million, in addition to a base salary.

Fast facts:

• Wall Street firms set aside money all year for bonuses and allocate it to employees after they know their year-end results; investors will know in January when fourth-quarter results are announced how much firms have set aside to cover compensation and benefits.
• Roughly half of all the revenue generated on Wall Street goes toward compensation, and most of it is paid in the form of a year-end bonus
• To date, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, and Citigroup have set aside $92.49 billion to pay employees, down slightly from $92.81 billion in the year ago period, according to Johnson Associates

Breakdown of Riches. Who's got the most, or least, to gain?

• Bond or fixed-income traders, who had the deepest declines in 2011, are projected to gain the biggest increase in the bonuses this year, from 10% to 20%
• Investment bankers, whose pay has dropped, can expect the trend to continue, by as much as 10% this year
• Employees in less volatile businesses, like asset management and commercial banking, will take in roughly what they did last year, or possibly be given an increase of as much as 10%
• Employees at the firms' hedge funds and private equity units can expect, on average, no increase to a 5 percent increase in bonuses, the survey predicted.
• Top executives, like Lloyd Blankfein at Goldman Sachs, will receive roughly the same in bonuses, falling or rising about 5%.  In 2011 Mr. Blankfein made about $12 million,

"These figures, compared to what real people make, are enormous, but compared to what Wall Street executives made in 2006 and 2007 it's a fraction of the pay." -- Mr. Johnson said.  [C-I Note: Case in point: Mr. Blankfein, who made $68.5 million for his work in 2007, the year before the financial crisis.]

C-I Note: Can Wall Street return to 2007 days?  Is that feasible considering what we now know led the financial crisis?  Would a flood of riches at Wall Street improve performance elsewhere?

For further details, go to [Dealbook, 11/4/12].