Top banker pay sinks below US$1 million in Asia as bonuses vanish
PAY for most senior investment bankers at Wall Street firms in Asia dropped to the lowest level in almost two decades, according to sources familiar with the matter, as a dearth of deals in China and Hong Kong hammered the industry.
Total compensation for many senior bankers in Asia ex-Japan fell to US$700,000 to US$800,000, well below the US$1 million or more they have typically earned since the turn of the millennium, the sources said, asking not to be identified discussing private matters. At least 20 per cent of managing directors at banks, including Morgan Stanley and UBS Group, received no bonuses last year, the sources said.
Pay is crumbling in part as firms seek to cut expenses amid one of the worst deal droughts ever seen, fuelled by rising political tension and a crackdown on private enterprise in China.
Goldman Sachs Group, JPMorgan Chase and Citigroup have made several rounds of job cuts in Asia over the past 18 months as stock sales and mergers tumble. Asia stock offerings outside Japan plunged 30 per cent last year, compared with a 45 per cent jump in the United States, according to data compiled by Bloomberg.
Bank of America (BOA) cut more than 20 investment banking jobs in Hong Kong this week, sources familiar with the matter said. UBS cut about two dozen investment bankers in Asia, mainly China-focused roles in Hong Kong, Bloomberg reported in October. JPMorgan slashed about 30 Asia dealmaking jobs earlier in the year.
The deals slump was reflected in compensation, with only a handful of top performers from each bank in Asia paid as much as US$1.5 million. That is about 20 per cent less than what star bankers took home in 2022, and half the amount from 2021, the sources said.
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Overall, total compensation for managing directors fell from 20 to 25 per cent across Asia, the sources said. The decline in bonuses was more pronounced than the base pay component.
Spokespersons at the banks declined to comment on the pay.
The range of compensation across Asia, excluding Japan, varied depending on the country and business line. A high-performing equity capital markets head, for example, may have been paid in the range of US$1.2 million to US$1.5 million, one of the sources said.
Resources and infrastructure bankers in Australia, some senior dealmakers in India and Korea and those focus on mergers and acquisitions fared better. China-focused bankers were among the biggest cohort that did not get bonuses, the sources said.
Across Wall Street, executives have warned of meagre bonus pay jumps for traders.
At JPMorgan, the overall bonus pool for its legion of traders will be close to flat compared with 2022, a source familiar with the matter said last month. That is similar to Citi, which is in the middle of its biggest restructuring in decades, where the pool will likely be little changed, if not slightly down.
Goldman Sachs and BOA are looking to sweeten payouts by at least a few percentage points for many of their traders, other sources said. BLOOMBERG
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