Goldman Sachs and JPMorgan Chase, two of Wall Street’s biggest investment firms, have announced massive bonuses for 2021 this week, following a record-breaking year for Wall Street deal-making.
Goldman Sachs enhanced its annual bonus pool for top-performing investment bankers by 40 percent to 50 percent, insiders say.
This year’s earnings at investment banks have been driven by record levels of deal-making and trading activity, as economic stimulus measures helped rocket stock markets around the world to all-time highs.
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Top achievers in M&A advising and equity capital markets received some of the largest bonuses at both Goldman and JPMorgan.
Bankers in Goldman’s M&A advisory and ECM divisions were given a typical 40 percent increase in bonuses with the actual best performers seeing rises of 50 percent or more.
Special stock bonuses were given to the bank’s partners, some of which were worth millions of dollars bankers who worked on some of the year’s biggest deals were among the recipients of the most generous rewards.
The biggest banks on Wall Street are facing fierce competition for talent and are paying more to recruit and retain top personnel.
The cost of retaining talent put a dampener on record 2021 earnings from both Goldman and JPMorgan.
JPMorgan Chase announced this week that non-interest expenses increased by 11 percent in the fourth quarter of last year, owing primarily to greater employee compensation. Last year, Goldman reported a 33 percent increase in compensation costs.
JPMorgan boss Jamie Dimon said: “The bank would pay what it takes to retain the bank’s top talent we will be competitive and pay and if those squeezes margin a little bit for shareholders, so be it.”
Top executives at Goldman Sachs echoed those statements on Tuesday, February 22.
Chief Financial Officer Denis Coleman said: “Our philosophy remains to pay for performance, and we are committed to rewarding top talent in a competitive labor environment,”
Morgan Stanley (MS.N) raised its annual bonus for top-performing staff by more than 20 percent.
Source: Reuters
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