Wall Street enjoys huge payouts in the best holiday bonus season since 2009

February 2, 2022, 9:51 PM UTC

Wall Street had a fantastic year, and they’ve decided to celebrate by rewarding bankers with the biggest bonuses since the end of the Great Recession. 

A resurgent stock market in 2021, a flurry of new companies with exciting IPOs, and a revival of global dealmaking hitting record highs have meant that a lot of banks made a lot of money.

Now, big banks are significantly increasing compensation rates for their most valued employees. Morgan Stanley said its compensation expenses had gone up 18% in 2021. Goldman Sachs spent around 23% more per employee in compensation in 2021 compared with 2020. And Bank of America also bumped up its compensation for dealmakers by 50% in 2021. These earnings are the highest Wall Street bankers have received since 2009, CNN reports.

Wall Street bonuses this year have been directed at the best performers and dealmakers, and they are “not going to be spread like any kind of peanut butter,” Betsy Duke, a former Federal Reserve governor, told Bloomberg. The biggest bonuses at Goldman Sachs, for example, were as high as 50% for top-performing investment bankers, Reuters reports.

The CEOs, though, are the ones receiving the highest pay increases. Morgan Stanley CEO James Gorman has been given a hefty $35 million payday after a 6% raise last year worth $2 million. JPMorgan Chase main man Jamie Dimon got an even bigger bump worth $3 million, bringing his total 2021 earnings to $34.5 million. And Goldman Sachs CEO David Solomon received a big $35 million salary last year, $23.1 million of which was paid out in performance-based restricted stock units, stock options rewarding Solomon’s “outstanding individual performance,” according to a Goldman filing with the SEC.

Solomon and Gorman are now tied as the highest-earning chiefs in U.S. banking, according to the New York Times.

The wave of bonuses sweeping Wall Street is not only the result of a lucrative year for banking. Bankers, especially junior employees, are feeling burned out by crushing workloads during the pandemic, and with the promise of an even more active dealmaking market in 2022, the banking labor market is becoming even tighter. That has led to banks’ willingness to pay more to keep their talent.

Some banks are even going so far as including provisions in their bonuses to discourage talent from leaving. Investment bank Credit Suisse announced that larger portions of bonuses would be paid in upfront cash this year, but if employees were to leave the company within the next three years, they’d have to pay their bonuses back.

Major banks including Citi, Barclays, and JPMorgan bumped up their first-year analyst salaries to $100,000 last summer from $85,000 in an effort to hold on to talent amid last year’s frenzy of mergers and demanding workloads. In January of this year, banks including Bank of America, Citi, and JPMorgan decided to up these starting salaries again to $110,000. But for many junior employees, these are small perks compared with the swaths of deals and high earnings banks pulled off last year.

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