Why JPMorgan Keeping Its Bonus Pool Unchanged Is Good News

NY Attorney General Files Lawsuit Against JP Morgan Chase Over Bear Stearns Fraud

NEW YORK, NY - OCTOBER 02: People pass a sign for JPMorgan Chase & Co. at it's headquarters in Manhattan on October 2, 2012 in New York City. New York Attorney General Eric Schneiderman has filed a civil lawsuit against JPMorgan Chase alleging widespread fraud in the way that mortgages were packaged and sold to investors in the days that lead-up to the financial crisis. The allegations, which were filed in New York State Supreme Court, concern business that transpired during 2006 and 2007 at a now-defunct Bear Stearns, the failed Wall Street firm which was purchased in 2008 by JPMorgan Chase. (Photo by Spencer Platt/Getty Images)

Photograph by Spencer Platt via Getty Images

JPMorgan‘s 2015 bonus pool, the money set aside for incentive pay, is expected to be the same as it was in 2014.

Though seemingly uneventful, this reflects that JPMorgan, the world’s largest investment bank by revenue, is performing significantly better than its competitors that are making sizable cuts to their bonus pools. As Options Group Inc. CEO Michael Karp told Bloomberg, “Flat is the new up.”

Deutsche Bank, Europe’s largest investment bank, is expected to reduce its bonus pool by nearly one third of what it was in 2014. Credit Suisse Group AG, Switzerland’s second-largest, is expected to make cuts of up to 60%.

New regulations and compliance have resulted in greater expenses for these banks. JPMorgan‘s revenue during the first 9 months of this year has decreased by 2.7%.

Whether or not these expectations are met depends on the trading environment in December. If it’s especially weak, it could force JPMorgan to condense its bonus pool.