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Bank of America has cut bonuses for its dealmakers by around 30% this year, as Wall Street banks squeeze pay after a year of tumbling investment banking fees.
The US bank communicated staff bonuses on 25 January. Dealmakers and headhunters told Financial News that the pool was down by around a third. In areas where performance has dropped further, notably equity capital markets and leveraged finance, bonuses were down by 50% compared to a year earlier, people familiar with the matter said.
It has been a brutal bonus season for dealmakers at Wall Street banks, which communicate the payouts ahead of European rivals, with top dealmakers seeing pay packets shrink by 30-50% compared to a record-breaking 2021.
Bank of America’s investment banking fees shrunk by 41% in 2022, the smallest drop of any Wall Street bank. Its equity capital market fees tumbled by 78% as fundraising on stock markets dropped to its lowest level since 1995.
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Bank of America is one of the few investment banks that has yet to roll out job cuts, with the bank instead freezing recruitment and relying on natural attrition of employees.
Senior dealmakers’ bonuses declined the most at Bank of America, the people said, with juniors either flat or down by 15-20%.
A Bank of America spokesperson declined to comment.
Barclays, Citigroup, Deutsche Bank and Morgan Stanley have all reintroduced their annual culls of underperforming employees after a three-year hiatus through the pandemic. Goldman Sachs has cut 3,200 employees, while Credit Suisse stripped out 2,700 jobs in the final quarter of 2022 and will cut 9,000 by 2025.
Dealmakers at Bank of America said that the bonus pool has not been skewed towards top performers and, unlike some Wall Street rivals, zero bonuses were not common.
Citigroup dealmakers saw bonuses fall 30-40%, while there was a similar decline at Morgan Stanley. At Goldman Sachs, variable pay was down by 50% for senior bankers, while bonuses slid by up to 30% at JPMorgan.
To contact the author of this story with feedback or news, email Paul Clarke
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