Wall Street is bracing for huge bonus cuts after a dismal year in which dealmaking has dried up and investment banking revenues dropped by half.
Final decisions have not been made at most banks, but it is clear that last year’s bumper payouts will not be repeated. At that time, the big banks were flush with profits from record dealmaking and struggling to retain staff.
The situation is worst for bankers who work on mergers and acquisitions and initial public offerings. JPMorgan Chase, Citigroup and Bank of America are all contemplating cutting those bonus pools by 30 per cent, people familiar with the discussions said.
The bonus pools for fixed income, commodities and currency traders are likely to be closer to flat, because those divisions had much better years than traditional investment banking, they said.
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