Wall Street bankers enjoy a £104bn pay bonanza as deal frenzy sparks war for top financial talent
Wall Street’s biggest banks hiked their pay by nearly 15 per cent last year as a frenzy of deal-making sparked a war for top financial talent.
JP Morgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup collectively doled out just over £104billion in pay and benefits in 2021 compared with the £91billion paid the year before.
JP Morgan was the biggest payer, shelling out £28.2billion, followed by Bank of America which paid out £26.5billion.
JP Morgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup collectively doled out £104bn in pay and benefits in 2021 compared with the £91bn paid the year before
Citigroup paid £18.4billion in compensation, while Morgan Stanley doled out £18.1billion and Goldman Sachs £13billion.
The boom in pay, bonuses and other benefits came as banks looked to retain their workers following a record year that saw them rake in record profits amid a surge in mergers and acquisitions as well as more companies listing on global stock markets.
Deal-making last year hit its highest levels since records began, with over £4.3 trillion worth agreed during the year as low interest rates and cash injections into the economy from central banks provided easy access to debt to fund acquisitions.
The surge was a 64 per cent rise year-on-year and 54 per cent higher than in 2019 before the Covid-19 pandemic struck.
It also sparked a boom in fees for investment banks, which last year totalled a record £115billion.
Most of the increased pay last year came in the form of fatter bonus cheques, rather than increased base salaries, which allow banks greater flexibility to cut back payments if earnings begin to decline, a scenario widely expected this year as the pace of deals begins to slow.
However, the ever-expanding wage bill and costs have been worrying investors, with Goldman’s profits for the fourth quarter of 2021 falling short of forecasts after its expenses jumped 23 per cent in the period to £5.3billion.
The bumper pay packets also follow growing frustration and protests about working hours at Wall Street institutions.