JayAs most of us are feeling the effects of rising inflation, the Office for National Statistics said last week reached a 10-year high of 5.1%Wealthy bankers and merchants are looking forward to receiving extraordinarily large bonuses for the new year.
Banks on both sides of the Atlantic are finalizing bonus pool deals that could be increased by up to 50% over the previous year, reaching their highest level since 2009 and a surge in mergers and acquisitions that spurred the financial crisis. Happened after
According to salary experts, the top investment bankers in the US – the “masters of the universe” – can expect to collect $5m-$10m (£3.7m-£7.5m) this year. The huge payday is partly due to losses caused by the pandemic, as the crisis has forced a wave of acquisitions and mergers.
Banks advising on such deals – including US private equity groups Clayton, DuBillier and Rice Morrison’s £7bn takeover and the London Stock Exchange The owner of Reuters, Refinitiv . £20bn purchase of – Collect a percentage of the total transaction for their hassle. They also collect fees for advising on floatation, private equity buyouts and loan offerings.
According to a study by Ernst & Young, coupled with a flurry of mergers and acquisitions (M&A), the number of initial public offerings (IPOs) increased by 64% in 2020 to 2,388 in 2021.
The biggest payday is expected in the US, according to Refinitiv data, where deals completed so far this year totaled $2.3 trillion – a record high.
Goldman Sachs, which had already collected $11 billion in fees by the end of September, is expected to increase its bonus pool by 50%, while rival Wall Street bank JP Morgan has been reducing its bonuses, according to sources last week. Can increase up to 40%.
Goldman chief executive David Solomon told employees in the bank’s October results announcement that they can expect bumper bonuses. “We are a culture of pay for performance, and there is no doubt that people are performing,” Solomon, who moonlights as a club DJ with the stage name D-Sol, said.
Solomons, which swallowed a $10 million cut in January 1MDB scandal In Malaysia, received a share-based bonus of up to $30m to be paid in 2026. The bank said the rewards “ensure leadership continuity” and “enhance retention in response to the rapidly escalating war for talent”.
JPMorgan presented its chief executive, Jamie Dimon, this summer with a “special award” of 1.5 million share options that could be worth as much as $49m over 10 years.
Last week the leniency was extended to Daniel Pinto, the bank’s chief operating officer and chairman, who is seen as a more likely successor to Dimon. He was given a “Retention Planning” share award of up to $25m on top of his $24.5m salary in 2020.
While they may not collect as big bonuses as their New York cousins, hundreds of London bankers will also take home millions when bonus season arrives in early January. Some luxury car dealers in the city say they are preparing for a possible hefty-wallet splash by increasing stock availability.
Boutique bankers in London are expected to be the biggest beneficiaries as regulations introduced after the 2008 financial crisis prevent large banks from offering bonuses of more than 100% of fixed wages (or double with shareholder approval).
The smaller, mostly Mayfair-based, boutique consultants are not covered by the rules, and regularly pay hefty amounts.
Robbie Warshaw, the bank that former Chancellor George Osborne joined as partner this yearAccording to accounts recorded at Companies House, it has paid £207m in profits to three of its partners (before Osborne joined four) over the past six years. Sir Simon Robbie, the majority shareholder who has been described as the city’s “trillion-dollar man”, the megadeals he has worked on, has collected just £137m over the past seven years.
The firm has yet to file this year’s accounts, but Robby is among those named as advisors on the LSE deal to buy Refinitiv, in which bankers, lawyers and other advisors are collectively called a Has been set to earn a good £830m.