"Gary Goldstein, president and CEO of Whitney Partners, an executive search group specializing in financial services, said changing the way compensation is distributed will be a change for the good.
"It has become very corrupt," Goldstein said. "I've watched it over the years and everyone was taking their piece of the pie ... and not paying attention to the end game, which is the little guy who ends up with all of these securities on their retirement accounts."
Bonuses at big banks could slide a lot further, and they won't come back to recent heights anytime soon, experts warned.
Johnson forecast a 15 percent to 20 percent drop in bonuses at the world's biggest financial firms this year, following a 45 percent decline in 2008.
"Any amount is too much," Johnson said of bonuses. "If you think it's bad now, it's going to be worse in '09."
Bonuses were excessive in recent years because factors like deregulation created outsized opportunities, an academic study published last month showed.
The study, by New York University Professor Thomas Philippon and University of Virginia Professor Ariell Reshef, found that 30-50 percent of the extra pay Wall Street employees got relative to the rest of the private sector over the last decade could be termed excess pay, or pay not justified by factors like education or technology.
There was a similar spike in relative pay just before the Great Depression in the 1930s, and financial sector compensation took many years to recover once it plummeted.
"The spike has passed, and people on Wall Street will be treated more like everybody else," said Roy Smith, finance professor at New York University and a former partner at Goldman Sachs.
Not every Wall Street employee will stand for it. Many will try to find jobs at smaller firms, which are not receiving support from the government and therefore do not have to limit pay.
But many will have to leave the industry altogether, said Robert Sedgwick, a lawyer at Morrison Cohen LLP in New York who negotiates executive pay packages."There are not nearly enough smaller places to go," Robert Sedgwick."
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