Bank of America bonuses for dealmakers, traders are broadly flat: source
BANK of America’s bonus pool for investment bankers will range from steady to 3 per cent lower for 2023 under pressure from a slowdown in dealmaking, but star performers will get higher payouts, according to a source familiar with the matter.
The company’s traders can expect flat or modestly higher bonuses, except for standouts in mortgages and credit, who will receive high single-digit percentage increases over 2022, the source said.
The bank began informing investment bankers and traders about their 2023 bonuses on Friday (Jan 26), the source said. Discretionary compensation at Wall Street banks is highly variable and based on performance.
The second-largest US lender will also give stock awards to rank-and-file employees who earn US$500,000 or less, or about 97 per cent of its workforce, according to a memo seen by Reuters on Thursday.
Bank of America declined to comment.
The company posted record full-year sales and trading revenue of US$17.4 billion, including zero days of trading losses in 2023.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
It also reported a pickup in dealmaking in the fourth quarter, which pushed investment banking fees 7 per cent higher to US$1.1 billion.
Wall Street giants face a challenging environment beset by subdued dealmaking, economic uncertainty and geopolitical tensions. While major banks have laid off thousands of employees, they are also focused on retaining top talent to capitalise on any resurgence in economic activity.
“Variability in bonuses between stars and everyone else, and particularly bottom performers, will be more of the norm this year,” said Natalie Machicao, director of the global banking practice at executive search firm Sheffield Haworth.
“It’s expensive to replace stars, particularly when the market inevitably comes back later this year, and banks want to retain the people who make a difference generally.”
Goldman Sachs chief financial officer Denis Coleman told a conference last month that compensation expenses will rise by a low-to-mid single-digit percentage this year.
Goldman bosses are considering fatter bonuses to retain star traders and dealmakers this year as the bank looks to win over some who were disappointed by smaller payments in 2022, Reuters reported in November, citing five sources with knowledge of the situation. REUTERS
Share with us your feedback on BT's products and services
