Goldman and JP Morgan are planning a bumper bonus for investment bankers

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Goldman Sachs and JPMorgan Chase are preparing to pay investment bankers a bumper bonus following a record year of trading activity on Wall Street.

Goldman is considering increasing the bonus pool by about 40-50% compared to the previous year, but at JP Morgan, the pool could be as large as 40%, according to those who were briefed on this issue. there is.

Generated investment bank record Fees thanks to the surge in transactions. According to Refinitiv data, US transaction value in the first 11 months of 2021 reached a record high of $ 2.3 trillion. Investment banking fees come from advice on mergers and acquisitions, private equity buyouts, listings and bond offerings.

Goldman According to financial statements, JP Morgan received more investment banking fees this year than any other bank.

In the first nine months of 2021, Goldman reported revenues from investment banks of $ 10.6 billion, an increase of approximately 65% ​​year-on-year. At JP Morgan, investment banking revenues for the same period were $ 9.7 billion, up 41% year-on-year.

Bankers hope that the surge in transactions will lead to a record season of bonuses. Bonuses are usually paid at the beginning of the new year. Representatives of the two banks declined to comment. News of higher bonus pools was previously reported by Bloomberg.

The final size of the bank’s bonus pool is still being decided and has not yet been communicated to staff. At Goldman, according to one person who was briefed on the bank’s plans, if bankers were given a bonus of less than 40% of their salary, it would be interpreted as a sign that they had spent a substandard year.

New York-based consultant Johnson Associates said last month that Wall Street bonuses rose 20-25% in merger and acquisition advisory services and 30-35% in stock and debt underwriting bankers. I was estimating.

Wages are by far the largest expense for the banking sector, and Wall Street lenders have steadily secured cash for bonuses throughout the year. At Goldman, compensation and benefit costs for the first nine months of 2021 increased 34% to $ 14.5 billion.

Investment banks such as Goldman and JP Morgan are already Raised Salary of a junior investment banker who complained of burnout during a pandemic. Earlier this year, the CEO said bankers could expect a good bonus season in 2021.

“We are a performance-based culture and there is no doubt that people are doing well,” Goldman CEO David Solomon said in an October earnings call. I am.

Goldman and JP Morgan are planning a bumper bonus for investment bankers

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The post Goldman and JP Morgan are planning a bumper bonus for investment bankers appeared first on Eminetra.

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