US bank results set to reignite controversy over City bonuses

A Billion Dollars

Controversy over City pay is likely to be reignited this week when the major US banks – including JP Morgan and Goldman Sachs – release their results for 2013.

The publication of the profitability of banks will clear the way for their staff to be told the size of their annual bonuses and signal a round of job moves around the financial sector as well as a wave of outcry about the payouts for thousands of staff in London.

JP Morgan, which has been hit by fines of almost $30bn in the last three years, kicks off the reporting season on Tuesday along with Wells Fargo & Co and is followed by Bank of America, which bought Merrill Lynch during the 2008 financial crisis, Goldman Sachs and Citigroup on Thursday, and Goldman's arch rival Morgan Stanley on Friday.

So far the big banks have amassed $63bn (£39bn) to pay their staff and their full salary and bonus bills will be finalised this week. Goldman is reportedly going to set aside the same amount for bonuses in 2013 as it did in 2012 – just over £7bn. The high-profile firm revealed at the end of the year that in 2012 its senior staff had received an average pay deal of £2.7m – up 50% on the year before.

The US banks will need to decide how to restructure the pay of their high-flyers next year following the imposition of the cap on bonuses by Brussels. Banks will be limited to paying bonuses worth one banker's salary or double in some cases.

The UK-based banks, which report their results next month, are all expected to ask their shareholders to sanction payouts twice the value of salaries as well as hand key employees additional payments to side-step the new rules.

Powered by article was written by Jill Treanor, for The Guardian on Sunday 12th January 2014 18.27 Europe/London © Guardian News and Media Limited 2010


JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News