Wall Street employees sees pay cut as banks preserve profit

Three of Wall Street’s largest investment banks slashed their first-half compensation pools for employees by the most in at least four years.

Bloomberg News reports that Goldman Sachs, JPMorgan and Morgan Stanley collectively reduced the amount of money they set aside for employee pay in the first and second quarters by 17% to $19bn to shore up profits, according to data compiled by Bloomberg from regulatory filings. That’s a steep drop from last year, when the three firms’ investment-banking divisions increased first-half compensation 4% to $22.9bn.

Goldman Sachs cut the most, reducing the amount set aside for workers by 28% to $5.99bn through June 30. Morgan Stanley clipped its pool by 14% to $7.7bn and JPMorgan by 6% to $5.3bn. Citigroup and Bank of America don’t break out compensation for their investment banks.

Wall Street firms have been focusing on costs as market turmoil prompts some investors to pull back and discourages dealmaking and as persistently low interest rates and stiffer regulation undermine revenue. While JPMorgan and Goldman Sachs saw increases in first-half trading revenue, other areas of investment banking including underwriting and advisory have lagged behind.

To access the complete Bloomberg News article hit the link below:

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