Wall Street to share Covid-era profits with its bankers
JPMorgan Chase and Goldman Sachs are reportedly planning to award their investment bankers with major bonuses in 2021, following a post-pandemic boom in deal-making.
JPMorgan is expected to boost its bonus pool for investment banking by about 40%, while Goldman Sachs may increase bonuses by as much as 50%, according to sources familiar with initial deliberations as quoted by Reuters.
In 2021, investment banks generated substantial profits due to record levels of deal activity, a hot IPO market and climbing equities, as economic stimulus measures helped propel global stock markets to all-time highs.
“You are paying for retention and not just paying for performance,” Eric Dobkin, the veteran banker who spent almost half a century at Goldman Sachs before retiring in 2016, told Bloomberg.
“This year, the firms may well have to overpay to keep the people they most want.”
Last month, the New York-based pay consultancy Johnson Associates said Wall Street was set to see the biggest bonus increases since the Great Recession following a busy and profitable year.
According to the consultancy, incentives at the end of 2021, including cash bonuses and equity awards, will be significantly higher compared with last year, when most professionals saw a decline in awards.
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