Goldman Sachs and JPMorgan to raise investment banker bonuses after deal-making frenzy
JPMorgan Chase & Co and Goldman Sachs may reward investment bankers by increasing bonus pools by as much as 50 per cent, following a boom in deal-making this year.
Following recent meetings to discuss and set pay for the year JPMorgan is considering upping the bonus pool by 40 per cent while Goldman Sachs is mulling up to 50 per cent, sources told Reuters, which first reported the news.
The news comes one month after compensation firm Johnson Associates forecast that bonuses for bankers on Wall Street would this year be the highest seen since 2009, and at the tail end of a year which saw record levels of deal-making activities as economies reopened and optimism returned for a time.
Dealmaking reached new heights this year, as the momentum seen each quarter continued unabated and last month propelled the global M&A market to a new all-time record of $5 trillion in deals.
In November global transactions topped $5 trillion in 2021 – 40 per cent ahead of the whole of 2020, according to new Refinitiv data.
Pent-up demand during the pandemic pushed dealmakers across the globe into an unprecedented frenzy, with the number of transactions announced so far this year hitting an all-time record of more than 52,000 – 22 per cent up on last year, and more than any other year since Refinitiv began tracking the data in 1980.
The high demand is likely to continue well into the new year too, with one survey published last week indicating that 90 per cent of dealmakers expect stronger activity over the next 12 months.
Much of this demand is expected to be driven by distressed deals and cheap UK companies, as analysis from Schroders indicates that, on average, UK companies are undervalued by around 30 per cent.