Goldman, JPMorgan and Bank of America boost banker, trader bonus pools by at least 10%

[NEW YORK] JPMorgan Chase, Goldman Sachs Group and Bank of America boosted their bonus pools for bankers and traders by at least 10 per cent, as the businesses benefited from a banner year in dealmaking and market activity.

Executives began communicating the compensation decisions to middle managers in recent weeks, as is common this time of year, the people said. The average figures described by insiders do not reflect the sweetest rewards in store for rainmakers, or the disappointment in store for those tagged as underperformers.

The payouts reflect a strong year for the nation’s largest banks, which collectively posted their largest annual profit since 2021. Volatility tied to Trump’s economic policy announcements paved the way for a banner year for traders – particularly in equities. At the same time “animal spirits” returned to the deal landscape after a tariff-induced pause in the first half of last year.

Last year’s combined revenue for the three firms’ investment-banking businesses was US$25.7 billion, up 12 per cent from the prior year, while their trading revenue was US$87.7 billion, a 16 per cent increase.

But firms are also focused on managing their expenses as artificial intelligence helps drive efficiencies, prompting increased scrutiny of staffing and compensation structures. In Europe, HSBC Holdings is handing some bankers little or no bonuses as the British lender seeks to emulate its Wall Street rivals with a more hard-edged, “eat-what-you-kill” stance.

Representatives for Bank of America, Goldman and JPMorgan declined to comment.

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Wall Street’s year-end rewards are notoriously volatile as the industry cycles through booms and busts. When times are good, individual windfalls can stretch into the millions of US dollars – well above what bankers and traders might reap from their salaries.

Compensation consultants have predicted for months that investment bankers, traders and asset- and wealth-management professionals would see healthy bonus increases this round. Investment bankers were expected to see 10 to 15 per cent boosts in their incentive pay, according to a November report from compensation consultant Johnson Associates.

A year ago, Wall Street bonuses also jumped across the board, with the total pool for payouts rising to a record US$47.5 billion as industry profits soared, according to estimates by New York State Comptroller Thomas DiNapoli. The average annual bonus rose by almost a third, to US$244,700, the first significant increase since the Covid-19 pandemic. BLOOMBERG