Discover your dream Career
For Recruiters

Will JPMorgan Call Rivals' Raises?

JPMorgan, which has climbed in league tables and outpaced other big banks' bottom-line results the past two quarters, might expect an easier time retaining and recruiting staff. But the bank can't ignore its place on the compensation ladder.

Tuesday's New York Post reports that Chief Executive Jamie Dimon is considering raising base salaries for investment bankers, as other major banks reportedly lean toward boosting theirs. Morgan Stanley recently raised some salaries, and Citigroup and Bank of America are said to plan similar moves.

The rumored changes come after lawmakers and others complained that Wall Street's traditional bonus-dominated pay structure tempts traders and bankers to take excessive risks in hope of big paydays they can keep even if their deals blow up in a later year. Morgan Stanley, for instance, said last month that its salary hikes for senior executives and managing directors "are not intended to increase total annual compensation," but to improve the balance between fixed and variable pay.

Still, with bonuses under a cloud especially for institutions unable to quickly repay taxpayer-funded bailout packages, banks' key employees may view salary amounts as "a bird in the hand" - for the near term, at least. Citi and BofA are even said to be considering offering total compensation guarantees, a type of inducement more typical of boom times.

The Post story indicates Dimon hopes JPMorgan's recent solidity can help offset individual finance professionals' famous "show me the money" mentality. He has been signaling current and prospective employees that "they shouldn't be bribed to work at a firm and that compensation packages shouldn't entirely be centered on cold hard cash," the newspaper says. "Sources said he's also played up JPMorgan's avoidance thus far of the blowups that have plagued its peers and its demonstration that it can weather choppy seas -- factors he thinks should be considered in addition to compensation."

author-card-avatar
AUTHORJon Jacobs Insider Comment

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Latest Jobs
BNY  Mellon
Senior Associate, Fund Accounting
BNY Mellon
Woodland Park, United States
BNY  Mellon
Analyst, Fund Accounting (Hybrid)
BNY Mellon
Lake Mary, United States
BNY  Mellon
Vice President, Fund Accounting
BNY Mellon
Lake Mary, United States
Experis
Admin Clerk Payroll Tax (PreFG)
Experis
Lake Mary, United States

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.