The executives whose pay is disclosed in public filings will have the steepest reductions, while bonuses for other workers will drop by between 10 per cent and 45 per cent this year, Bloomberg news reported on Thursday.

Rewards are likely to decline even more in 2009 as business slows further, said Mr Alan Johnson, managing director of Johnson Associates, a compensation consulting firm.

A US$700 billion (S$1.04 trillion) government bailout of the financial industry has led to calls from politicians including New York Attorney General Andrew Cuomo and Rep. Henry Waxman, a California Democrat, for companies such as Goldman Sachs Group Inc. and Morgan Stanley to justify year-end rewards.

That's likely to reduce pay for senior executives whose compensation is disclosed in proxy filings by more than for other workers, Mr Johnson said.

'The pressure from the politicians is intense,' said Mr Johnson, whose firm is based in New York. 'You're going to be treated worse if you're in the proxy.'

Goldman, which converted in Sept into the fourth-biggest bank holding company from the largest US securities firm, said in its proxy filing this year that Chief Executive Officer Lloyd Blankfein received a 2007 bonus of US$67.9 million and that Co-Presidents Jon Winkelried and Gary Cohn each received US$66.9 million. Last month, Goldman received US$10 billion as part of the government's US$700 billion bailout.

No cash

This year, banking executives will 'get almost no cash and most of any incentive they get is going to get paid in either restricted stock or options,' Mr Johnson said. 'It isn't going to be such a good deal to be in proxy statements. I think it's going to be a firestorm.'

For workers whose compensation isn't disclosed, Mr Johnson estimates that investment bankers and employees in the fixed-income departments will have bonuses reduced betwen 35 per cent and 45 per cent this year.

People who work in prime brokerage departments will have their year-end awards cut by 15 per cent to 20 per cent, the report estimates.

'However, thanks in part to the financial bailouts and mergers we've seen recently, the decline in incentive payments won't be as drastic as first thought,' Mr Johnson said in the report.

The decline in bonuses won't be that different from reductions seen in previous industry downturns such as in 2001, Mr Johnson said. 'What's made it really hard on the industry is that pay is down in '08 and it's likely to be down in '09 as well,' he said.

Following is an estimate of the size of bonus reductions this year in different business areas of the financial industry