Fidelity cuts raises, bonuses, profit-sharing

Fidelity Investments, responding to what it called continuing challenges as the recession lingers, told employees in all but its lowest-echelon bonus pool that they will not get merit increases this year.
APR 16, 2009
By  Sue Asci
Fidelity Investments, responding to what it called continuing challenges as the recession lingers, told employees in all but its lowest-echelon bonus pool that they will not get merit increases this year. In a companywide memo on Wednesday, president Rodger Lawson said the only employees eligible for raises — which take effect in July — are those eligible for bonuses equal to 15% of their base salary, a population that comprises the “lower and middle level of our compensation structure,” said Fidelity spokeswoman Anne Crowley. Mr. Lawson also warned all employees that their year-end bonus and profit-sharing awards are likely to be slashed this year. Bonuses range from as low as 12% to greater than 100% of base pay, she said. Boston-based Fidelity for the past several years has given most employees 10% of their salaries in profit-sharing. “Our president is saying it is quite probable, given business forecasts, that we won’t be funding that at as high a percentage,” Ms. Crowley said. “Our bonus-pool dollars also may be lower than they’ve been in past years.” Fidelity late last year said it would lay off at least 3,000 employees by the end of March. Mr. Lawson’s memo did not address layoffs, and the company declined to comment beyond saying that the target has been reached. “Fidelity is, and has been, ahead of the downturn in the financial markets and as a result is positioned very well for the future,” Ms. Crowley added in an e-mail. “While we cannot know when the economy will turn around, we will continue to recognize and reward the contributions that each individual and business unit makes.” Fidelity employs about 40,000 people worldwide and had $2.4 trillion in assets under custody, including managed assets of nearly $1.2 trillion, as of Feb. 28.

Latest News

Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households
Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households

Pew survey reveals slight majority consensus on tax rates, but views splinter based on political alignment and income levels.

The Fed's going to cut rates
The Fed's going to cut rates

While the Federal Reserve's decision to hold interest rates steady in March was widely expected, it's the reactions from financial professionals that provide a more nuanced picture of the central bank's approach.

Ontario Pension Fund revamps PE business in light of global risk
Ontario Pension Fund revamps PE business in light of global risk

The pioneering member of Canada's Maple Eight is stepping back from its go-it-alone private equity approach as a drought in deals and Trump's trade war prompt a rethink.

Raymond James, RBC reel in UBS advisors managing over $690M in assets
Raymond James, RBC reel in UBS advisors managing over $690M in assets

The firms' latest additions in Florida and Nevada come as a strategic change at UBS raises risk of advisor defections.

Assetmark debuts new advisor succession planning program
Assetmark debuts new advisor succession planning program

The new program offers opportunities and events structured for rookies, next-gen advisor leaders, and soon-to-exit veterans.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies