December 18, 2008 5:10 PM

Sullivan & Cromwell Bonuses Cut, But No Freeze on Pay

Posted by Ed Shanahan

By Julie Triedman
No surprise: Sullivan & Cromwell has just told its associates to expect leaner year-end bonuses this year. But the firm indicated there may be additional money for them in April.

In individual memos distributed late this afternoon, firm chairman H. Rodgin Cohen and vice chairman Joseph Shenker told associates they will receive regular year-end bonuses worth about half what they were last year.

But the memos also said the firm intends to issue all associates another check in April. The spring distribution, or supplemental bonus, will be based on the firm's overall financial performance. The firm also issued supplemental bonuses last year, though the circumstances were somewhat different since it was the height of the dealmaking boom.

This year, as we have reported, rival Wall Street firms for which bonus information has been made public--Davis Polk & Wardwell, Cravath, Swaine & Moore, and Simpson Thacher & Bartlett--indicated that there will be no special bonuses on top of the year-end ones.

There was more good news contained in the memos: this year, the firm plans to expand the supplemental bonus pool to include all classes, not just the four senior-most classes.

Year-end bonuses for 2008 now range from $17,500 for first-years to $32,500 for eighth-year associates, according to the memos; last year, year-end bonuses, which are not tied to a minimum hours requirement, were twice that. (The news applies to all of Sulllivan's roughly 450 associates worldwide. Unlike many rivals, associate pay is the same across the firm.)

Last week, as sibling publication LegalWeek reported, Latham & Watkins became the first large firm to freeze associate pay for 2009; other firms are expected to follow suit. In what must come as a relief to many at the firm, Sullivan associates were told that their salaries will, in fact, rise in 2009 as they have in the past.

First-years at Sullivan earn a base salary of $160,000; the most senior associates' base pay in 2007 was $310,000, we reported last year.

The amount of that additional bonus, associates were told in the memo, will not be known until spring 2009, after the year-end results and audit are in.

(Last spring, a source within the firm told The New York Law Journal the additional bonus ranged from $15,000 for fifth-years to $30,000 for eighth-years; those numbers have never been confirmed by the firm.)

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