Morning Coffee: How to repeatedly earn a $33m bonus at JPMorgan. UBS is hiring M&A bankers, but is fussy
Bonuses were announced last week at JPMorgan, and for the vast majority of people at the bank they seem to be as "meh" as might be expected for a year in which profits fell 22% and the stock had its worst year since 2011. For CEO Jamie Dimon, though, 2022's bonus is still looking pretty fine.
Jamie's bonus was announced to the public yesterday. For his "exemplary" efforts at the top of the firm, Dimon was awarded a bonus of $33m to supplement his $1.5m salary, which is the sort of thing that's possible in jurisdictions that don't adhere to the European rule restricting bonuses to 2x fixed pay. Dimon's 2022 bonus was equivalent to 2021's, which was his biggest bonus since 2008. A new norm has been set.
JPMorgan is still very besotted with its CEO: “The firm is in a uniquely fortunate position to be led by such a highly talented and experienced executive who continues to grow the company,” the filing gushed. If Dimon could lead the bank forever, the board would clearly like that.
The first trick to getting a huge bonus at JPMorgan is therefore to make your bosses love you. The second is to jump through all the hoops they've set: Dimon's pay is determined by his delivery of business results; his work on risk, controls and conduct; something called 'client/customer/stakeholder,' and his endeavours in the realm of teamwork and leadership. Dimon's "stewardship" was considered more than adequate in each, and if the reopening of the economy introduced "volatility" to JPMorgan's financial performance, that wasn't his fault.
The final technique for receiving giant JPMorgan bonuses on repeat is to engender a belief that you are value for money and potentially, therefore, underpaid. Last year, James Gorman at Morgan Stanley and David Solomon at Goldman Sachs each got $500k more than Dimon in salary plus bonus, and JPMorgan's proxy report stressed that Dimon received by far the smallest share of three year profits out of the CEOs at six rival banks. This was one reason why, in 2022, Dimon received his salary, his giant bonus, and a one off 'special award' worth $50m over three years. That award isn't being repeated this year. This might be considered a pay cut, and is very likely a response to investors' disgruntlement at the board's urge to lavish prizes on their favourite.
Separately, UBS wants some more investment bankers. But it doesn't want just any investment bankers: the Financial Times says it's mostly interested in people from boutiques because it thinks the talent is stronger there than in big banks and because boutique managing directors are more likely to feel thwarted by a lack of opportunities for promotion. 'A person with knowledge of UBS’s plans' says the Swiss bank will paying generous packages to lure boutique talent, but that these packages will also be in line with the market, which might suggest any guarantees UBS is paying will be down 30% on last year.
Meanwhile...
Richard Gnodde at Goldman Sachs says the firm is still hiring selectively. You have to take a long-term view and look through the cycle. Over time it still offers terrific returns for our people.” (Bloomberg)
Brian Moynihan has been reiterating BofA's hiring issues. “We overachieved on the hiring side and we went past our target headcount. And now we can do a slowdown in hiring.” (Bloomberg)
Moynihan says bankers are ok with bonuses falling. "In investment banking, compensation is down when revenues are down. But last year they had a pretty good year. They understand that’s how the world works." (Bloomberg)
The Renaissance Medallion fund, which hardly ever has losing months, recorded two losing months in 2022. "Medallion had only three down months between 2000 and 2010, so for the fund to have two in a year is pretty surprising." (WSJ)
European fintech Mangopay wants to hire 250 people. (Finextra)
Brevan Howard has appointed Jon Freedman from Point72 as head of risk and middle office IT in London. (Financial News)
Capital One is letting go of 1,100 technology staff. (Bloomberg)
Sometimes it makes sense to burn bridges. "It’s the best thing you can do because it forces you to build your own business.” (WSJ)
Netflix is looking for a flight attendant for its private jet. It will pay $60k to $385k, depending on background. (WSJ)
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