, Columnist
The Big Bucks and Bonuses at Banks Won't Last
Wall Street focuses on retention and one-offs to avoid driving up fixed costs.
Banker pay boomed but evolving bonus policies may mean few luxury cars in the parking lots.
Photographer: David Paul Morris/Bloomberg
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Soaring pay and bonuses came as an unwelcome shock to shareholders during U.S. banks’ 2021 earnings season. Most big European banks are also likely to complain about the exploding cost of talent in their results over the next few weeks.
The big worry for investors — after the best banking profits in years — is that pay profligacy today will bake in higher costs that are harder to shed when trading and dealmaking inevitably slow. There are already signs that the market for new listings is sputtering to a standstill.