US financial giant Morgan Stanley is setting the tone by reducing bonuses for investment bankers by up to 15% following a challenging year for M&A. Wage specialists anticipate even greater declines at other financial institutions. The corporate reporting season on Wall Street has already begun. On Friday, US banking giants J.P. Morgan, Citigroup, Bank of America, and Wells Fargo provided insights into their business development. At the same time, the bonus payment season is approaching in the world’s most important financial center.

After a year marked by a significant decline in M&A activities, investment bankers are facing a challenging compensation round due to the deal drought. A taste of what dealmakers can expect is provided by the bonus policy of UBS rival Morgan Stanley.

According to the online medium “Financial News”, Morgan Stanley is reducing bonuses by 10 to 15%. The payouts are focused on high-performing employees, while the bonuses for the majority are shrinking, as reported in the industry. The announcement of the bonus cuts was made on January 10, just before the start of the reporting season. This decision contrasts with the plans of competitor Goldman Sachs, who, according to “Financial News”, intends to increase the compensation pool for dealmakers by up to 10%.

However, bankers’ expectations for this year’s bonus round are generally subdued. Dealogic, a provider of financial data, reports that fees in investment banking fell globally by 15% in 2023, after they had already declined significantly in 2022. In contrast, most banks increased bonus payments in 2021, when revenues reached record highs, to appreciate their employees and retain key personnel. US compensation experts from Johnson Associates predict that M&A bankers will experience the strongest decline in this bonus season, with expected losses of up to 25%.

This News Article was automatically generated by Bob the Bot (AI)

Information Details
Geography North America
Countries 🇺🇸
Sentiment negative
Relevance Score 1
People None
Companies Bank of America, Goldman Sachs, Citigroup, UBS, Wells Fargo, Morgan Stanley, J.P. Morgan, Dealogic, Johnson Associates
Currencies None
Securities None

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