Goldman Sachs Group, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns together paid $65.6 billion in compensation and benefits last year to their 186,000 employees. Year-end bonuses usually account for 60 percent of the total, meaning bonuses exceeded the $36 billion distributed in 2006 when the industry reported all-time high profits.  The bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria.  "To many people, it will be shocking and questionable," said Jeanne Branthover, managing director of Boyden Global Executive Search. "People in New York in the world of investment banking will understand it. It's critical that pay is still there or you're going to lose really good people."  The five firms' combined profit for the full year was $11.5 billion, the lowest since 2002. The firms, based in New York, have said they would eliminate at least 4,900 jobs as losses mount from the collapse of the subprime mortgage market.  Shareholders in the securities industry had their worst year since 2002, as Merrill Lynch and Bear Stearns slumped more than 40 percent in New York trading, costing the chief executives their jobs. Morgan Stanley fell 21 percent and Lehman dropped 16 percent. Only Goldman rose, gaining 7.9 percent.  Bonuses paid for 2007 probably will mark a high point as revenue declines stretch into this year, said Charles Geisst, a finance professor at Manhattan College in Riverdale, N.Y.  "The gilded age just ended," he said. "Ferrari dealers are going to be selling Tata cars. I think this is going to be the worst year we've had in a very long time."  Management teams at Morgan Stanley, Merrill and Bear Stearns, which each recorded their worst quarters in history, rewarded employees who made money in the first half of the year, and who work in fastest-growing businesses, by lifting the percentage of revenue they pay in salaries, bonuses and benefits. At Morgan Stanley and Bear Stearns, the chief executives did not accept bonuses.
Wall Street's five biggest firms together paid a record $39 billion in bonuses, even though three of them suffered the worst quarterly losses in their history and shareholders lost more than $80 billion.