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Big Paychecks Return to Wall Street

Who says the era of giant paychecks is over? The Wall Street Journal reports that with business returning to Wall Street, executive compensation will be making a similar comeback. Goldman Sachs, for example, is set to pay out $20 billion this year—about $700,000 per employee or double last year's $363,000 average. Of course, the big payouts depend on continued market improvement and on what field an executive is in. Junk-bond trading is improving, and so is compensation in that area, although asset-backed security paychecks are iffy because that market remains frozen. The real trick is making salaries competitive while managing public perception. In order to avoid a public reprimand, at least one company has discussed compensation with the Obama administration, while others are changing their salary/bonus ratio and adding stock to packages along with "clawback" provisions that tie paychecks to long-term performance of the firm.