As the real economy continues to decelerate and the Federal Reserve's 'Not QE' catapulted growth stocks to the moon, well not anymore since coronavirus has spooked global markets, bankers across the industry have seen their annual bonuses stagnate.
JPMorgan Chase & Co. recently decided to keep annual bonuses flat across its investment bank segment for the 2019 year, reported Bloomberg.
JPM bankers should not complain about the lack of pay increases, at least they still have a job, considering an industrywide cut has shocked many in the last year, as macroeconomic headwinds continue to rise.
The bank noted compensation expense grew 4% to $10.6 billion for the corporate and investment bank units last year as headcount rose 3%.
Bloomberg said pay for top management increased by 1.6% to 2.4% last year, a small boost compared to 2018 figures.
Even CEO Jamie Dimon's compensation only increased by a mere 1.6% to $31.5 million, a reduction in growth seen over the prior year.
Despite employment compensation growth waning, JPM recorded some of the highest profits ever with $36.4 billion, due to a 56% increase in stock and bond trading in the fourth quarter, after it single-handedly triggered the repo crisis, forcing the Fed to launch 'Not QE.'
Across the industry, we've noted as the stock market hit record highs, thousands of bankers have been laid off.
Morgan Stanley last month fired 2% of its workforce, or approximately 1,500 workers, due to a slowdown in the economy.
Earlier this month, Barclays Plc slashed 100 senior staff at its investment bank unit. These cuts were primarily made in Europe and the U.S.
Goldman Sachs has had its fair share of layoffs and pay reduction in 2019. Now bankers at the firm, who have recently visited China, have been told to quarantine themselves at home for two weeks for fears they might have coronavirus.
It seems coronavirus could be the next excuse by banks to reduce pay or layoff staff members.