JPMorgan Chase & Co. (JPM) plans to boost bonuses for investment bankers while Morgan Stanley (MS) increases the cash portion of year-end payouts, the Wall Street Journal reported, citing unidentified people familiar with the plans.
Some JPMorgan bankers will get an average increase of about 6 percent to 10 percent, compared with a year earlier, the newspaper said. Bond, currency and commodities traders will probably have their payouts cut about 5 percent, it said.
Morgan Stanley will distribute a larger share of bonuses in cash instead of deferred payments, the Journal said. The firm deferred bonuses last year for people getting both total pay of more than $350,000 and at least $50,000 of incentive compensation, a person briefed on the matter told Bloomberg News in January.
Wall Street firms are under pressure to increase rewards for equity traders and dealmakers whose divisions fueled revenue this year amid a slump in fixed-income business. Total pay for employees in fixed-income units may be down 10 percent, recruitment firm Options Group Inc. wrote a November report.
Employees at Goldman Sachs Group Inc. expect its bonus pool to be little changed this year, the Journal said. That would mark a shift from this year’s first nine months, when the firm set aside $10.4 billion for compensation, or 5 percent less than the same period a year earlier.
Spokesmen for New York-based JPMorgan, Morgan Stanley and Goldman Sachs didn’t immediately respond to messages after normal business hours or declined to comment on plans for pay. Firms typically make final decisions at yearend.
Citigroup Inc. (C)’s bonuses for investment bankers probably will be little changed compared with 2012, while traders and salespeople could get cuts of 2 percent as the New York-based lender seeks to reduce costs, a person briefed on the policies told Bloomberg News last week.
Investment banking revenue at the five biggest U.S. firms - - Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America Corp. (BAC) and Citigroup -- rose 16 percent in the first nine months, while equity trading revenue climbed 9 percent, according to data compiled by Bloomberg. Fixed-income trading fell 11 percent. U.S. stocks surged this year, with the Standard & Poor’s 500 Index climbing 28 percent and reaching record highs.
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