July 24 (Bloomberg) -- JPMorgan Chase & Co<http://mail.google.com/apps/quote?ticker=JPM%3AUS>., the second- largest U.S. bank by assets, will increase salaries for investment bankers, making their pay more competitive after rivals took similar steps, a person familiar with the firm said.
The plan, unveiled yesterday at a meeting with investment bank co-headsSteven Black<http://search.bloomberg.com/search?q=Steven+Black&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> and William Winters<http://search.bloomberg.com/search?q=William+Winters&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, affects those who earn half or more of their total compensation in year-end bonuses, the person said, declining to be identified because pay matters are confidential. It will be implemented in 2010 and details will be announced closer to the end of this year. The salary increase doesn’t change total pay. JPMorgan, based in New York, is seeking to keep pace with rivals that boosted salaries amid restrictions on bonuses, and make its compensation costs more predictable. Citigroup Inc., Morgan Stanley<http://mail.google.com/apps/quote?ticker=MS%3AUS> and UBS AG <http://mail.google.com/apps/quote?ticker=UBS%3AUS> have increased salaries for some employees. Citigroup will raise base pay as much as 50 percent. Morgan Stanley said in May it will increase base pay for some executives, while UBS increased banker salaries by half. “There is more pressure from competitors now,” Chief Executive Officer Jamie Dimon<http://search.bloomberg.com/search?q=Jamie+Dimon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> said July 16 on a call with reporters when the company reported earnings. “It’s gone back to more of a competitive environment.” About half of JPMorgan’s 25,783 investment-banking employees<http://mail.google.com/apps/quote?ticker=JPM%3AUS> will be eligible to receive more of their pay in salary, the person said. All employees will be eligible for a merit-based raise for 2010. JPMorgan spokeswoman Kristin Lemkau<http://search.bloomberg.com/search?q=Kristin+Lemkau&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> confirmed the pay discussions took place at yesterday’s meeting. Compensation Pool JPMorgan’s investment bank is having a record year, with revenue in the first half of $15.7 billion. In the first six months of 2009, the unit set aside $6.01 billion for employees’ compensation, equal to 38 percent of revenue in the period. Goldman Sachs Group Inc. <http://mail.google.com/apps/quote?ticker=GS%3AUS> allocated $11.4 billion, or 49 percent of revenue, and Morgan Stanley put aside $5.91 billion, or 71 percent of the half-year revenue, for employee salaries, bonuses and benefits. All three firms have returned government capital, removing them from restrictions on how they pay their workers. Citigroup has yet to repay any of the $45 billion in government funds it received. Bank of America Corp. <http://mail.google.com/apps/quote?ticker=BAC%3AUS>, which bought Merrill Lynch & Co., said in March it may boost salaries as a proportion of total compensation. 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. The more senior an employee, the bigger percentage of their pay typically comes in the form of the year-end bonus. Payments are often made in restricted stock that can’t be cashed out for several years. Lost Bonuses The worst financial crisis since the Great Depression has led to more than $1.52 trillion in writedowns and credit losses and more than 328,000 job cuts across the worldwide financial industry. Senior management at companies, including JPMorgan, Citigroup and Morgan Stanley, lost their bonuses last year. The Obama administration appointed Washington lawyer Kenneth Feinberg<http://search.bloomberg.com/search?q=Kenneth+Feinberg&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> in June as “special master” to review compensation at companies that received government funds. He will have the authority to regulate compensation for 175 executives at seven companies, including Citigroup, that received “exceptional” government help. Banks raising salaries or guaranteeing bonuses to retain key employees may strip themselves of some flexibility in their compensation costs, an Internet survey by eFinancialCareer.com said in June. http://www.bloomberg.com/apps/news?pid=20601087&sid=arW8I3OcMh3c -- *Swami Vivekananda's life through pictures.* http://www.youtube.com/watch?v=JntwFFlzecA --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
