ADVERTISEMENT

JPMorgan Keeps Bonuses Flat for Bankers, Traders

Compensation expense rose 4% to $10.6 billion for the corporate and investment bank in 2019 as headcount rose 3%, the bank said.

JPMorgan Keeps Bonuses Flat for Bankers, Traders
A pedestrian walks past a JP Morgan Chase & Co. signage, New York. (Source: Bloomberg) 

(Bloomberg) -- JPMorgan Chase & Co. is keeping annual bonuses at its corporate and investment bank roughly flat for 2019 even as workers across Wall Street brace for a drop in payouts.

The biggest U.S. bank’s decision, described by people briefed on the matter, came after the unit notched its best year since at least 2011. Most of the workers were told about their payouts last week, said one of the people.

Compensation expense rose 4% to $10.6 billion for the corporate and investment bank in 2019 as headcount climbed 3%, the bank said earlier this month. The unit accounts for about a third of the firm’s revenue. Total compensation costs as reported by U.S. banks don’t always directly show changes to the bonus pool.

Consultant Johnson Associates Inc. predicted in November that year-end incentives would be down 5% across Wall Street, with investment bankers probably taking in more, and equities traders faring the worst. In Europe, recruiters had forecast that shrinking revenues would translate into double-digit percentage declines for many trading and investment banking teams.

Top executives on JPMorgan’s operating committee received small boosts to compensation -- of 1.6% to 2.4% -- for their work in 2019, Bloomberg reported last week. Chief Executive Officer Jamie Dimon’s compensation package increased 1.6% to $31.5 million -- smaller than the bump he got in 2018.

JPMorgan notched the highest profit in U.S. banking history for the second year in a row with $36.4 billion, spurred in part by a 56% surge in stock and bond trading in the fourth quarter. Trading revenue for the full year rose 6.7%, while revenue from advising on M&A and bond and stock offerings rose 1.4%.

Still, JPMorgan has been tightening its belt more than in previous years amid a growing number of potential pitfalls for the economy. It’s been building up its employee presence in lower-cost locations and was considering relocating several thousand New York-based employees out of the area, Bloomberg reported in October.

To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer

©2020 Bloomberg L.P.

Opinion
India Is Still The Largest Stable Emerging Market Economy, Says JP Morgan’s Gori