RJ and Makay

Here's some evidence that pay-for-performance is alive and well on Wall Street: The average Wall Street bonus dropped 5% in 2010, according to the eFinancialCareers annual Global Bonus Survey completed in mid-January.

Still, 56% of bonus-eligible financial professionals got a larger bonus than the previous year. Nineteen percent got a smaller bonus and 8% got no bonus.

If federal regulators get their way, top executives at large financial firms will have to wait at least three years to be paid half of their annual bonuses. The proposal is intended to help prevent another financial crisis by limiting risk-taking for short-term gain on the part of top financial company executives.

The Federal Deposit Insurance Corporation (FDIC) voted Monday to advance the proposed rule, which builds on more general requirements in last year's financial regulatory law to curtail risk-taking. The rule targets firms with $50 billion or more in assets and would apply to major financial institutions like Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs, and Wells Fargo.

Last year was Wall Street's best ever in terms of total compensation and benefits, which hit a record high of $135 billion. The Wall Street Journal reported that finding after analyzing 25 large publicly traded financial firms with at least $1 billion in market capitalization. Together, these firms have $750 billion in market cap, or 85% of the financial industry's total stock market value.

Wall Street's latest compensation figure is a 5.7% increase from 2009's $128 billion total. "Things are shifting back to where they were before," observes J. Robert Brown, a University of Denver law professor who studies compensation and corporate governance.