NEW YORK - JPMorgan Chase & Co's investment bankers will begin getting more of their pay in salary next year and less in bonuses as the bank shifts the weighting to remain competitive with rivals, a person familiar with the firm said.
A Bloomberg report said that the people affected are those who earn half or more of their total compensation in year-end bonuses, the source said, declining to be identified because pay matters are confidential.
It will be implemented next year, after details are announced at the end of this year. The bankers' total pay will not change because bonuses will be lowered.
JPMorgan, which is based in New York, is seeking to keep pace with rivals that boosted salaries amid restrictions on bonuses, and to make its compensation costs more predictable, Bloomberg reported.
Citigroup, Morgan Stanley and UBS have increased salaries for some employees. Citigroup will raise base pay by as much as 50 per cent.
Morgan Stanley said in May it will increase base pay for some executives, while UBS increased banker salaries by 50 per cent. JPMorgan's investment bank is having a record year, with revenue in the first half of US$15.7 billion (S$23 billion).
In the first six months of this year, the unit set aside US$6.01 billion for employees' compensation, equal to 38 per cent of revenue in the period.
According to Bloomberg, Goldman Sachs Group allocated US$11.4 billion, or 49 per cent of revenue, and Morgan Stanley put aside US$5.91 billion, or 71 per cent of the half-year revenue, for employee salaries, bonuses and benefits.
Investment banks have traditionally awarded a large portion of employees' compensation in the form of year-end bonuses tied to the performance of the firm and the individual.
More senior employees typically get a bigger percentage of their pay in the form of the year-end bonus.
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