JMP Group Inc. (JMP), the investment bank co-founded by Joseph Jolson, plans to double its market share in stock offerings after last year’s record revenue, partly by promising bankers they won’t have to wait as much to get paid.
Net revenue rose 48 percent to $149.2 million in 2013 as San Francisco-based JMP raised more money for companies in initial public offerings and other stock sales, according to a statement today. As larger banks defer more pay, Jolson said his firm plans to lure bankers with comparatively larger immediate payments based on the revenue they generate.
“We’re growing our research and investment-banking footprint,” Jolson, 55, JMP’s chairman and chief executive officer, said in a telephone interview. “We don’t cap our producers and we pay them if they produce.”
Jolson said his bankers generally get most of their pay in cash, with a small portion deferred for two years. Morgan Stanley (MS), after deferring 100 percent of 2012 bonuses for many senior bankers, decided to pay at least some portion of last year’s awards in cash, a person briefed on the plan said in January.
Prodded by regulators, investment banks have delayed more compensation so that employees don’t get rewarded upfront for risky deals that may go sour later.
JMP’s 235 employees underwrite stock offerings, produce research reports on companies and trade for institutional investors. The firm is seeking to capture 1 percent of the fee pool for equity capital markets by 2017, Jolson said.
Last year, JMP hired Thomas Wright, the former head of trading at Sanford C. Bernstein & Co., as director of equities in New York.
JMP was started in 2000 by former executives of Montgomery Securities, the San Francisco-based investment bank founded by Thomas Weisel that prospered during the 1990s technology boom. The stock climbed more than 7 percent during the 12 months ended yesterday.
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