The era of big bonuses, you might say, is over. Earlier this year, Morgan Stanley, Goldman Sachs Group, Citigroup, and many others announced they’d be cutting back on investment banker bonuses in some shape or form. It doesn’t matter how well the company is doing: JPMorgan Chase & Co. is keeping annual bonuses at its corporate and investment bank unchanged this year despite notching a record $36.4 billion profit in 2019. On the other side of the spectrum, Deutsche Bank AG executives have agreed to forfeit the component of their bonus that reflects personal performance as the lender prepares to unveil its biggest annual loss since 2015.
The pattern reflects a general reckoning across banking as electronic systems de-emphasize rewarding individual successes in favor of more broad group performance. “It’s a team sport now,” Chris Purves, head of UBS Group AG’s Strategic Development Lab, told Bloomberg in January.