- Bank of America plans to increase rewards for its employees by more than 40 percent.
- The higher payouts come amid surging competition for talent on Wall Street.
According to people briefed on the discussions, Bank of America has plans to increase the bonus pool for its employees by nearly 40 percent.
Senior Bank of America executives plan to increase the bonus pool for investment bankers by more than 40 percent. For sales and trading operations, bonuses could rise by an average of more than 30 percent.
The mover has come after a disastrous year in 2020 when the pandemic hit the world badly and forced many organizations to lay off workers and slash salaries and bonuses.
The decision to increase the bonus pool means rewards for employees may climb even faster than some units’ annual revenue growth, and in other cases, even if revenue slipped, a break with the industry’s typical practice.
The reason is that executives are considering how organizations performed over the last two years, in which many achieved significantly higher earnings than pre-pandemic levels.
The juicier payouts for Bank of America employees come amid mounting competition for talent on Wall Street and reflect a shift in thinking among Bank of America’s leaders.
The bank’s rivals Goldman Sachs and JP Morgan Chase bumped up their bonuses for 2020, leaving it all the more vulnerable to poaching as Wall Street’s boom continued and a war for talent heated up. These companies plan to raise their bonus pools for investment bankers by 40 percent and 50 percent, respectively.
According to a study by compensation firm Johnson Associates, analysts expected bonuses for Wall Street staffers to be at their highest last year since 2009, with investment bankers and equities in line for the biggest payouts.
However, Bank of America has declined to comment on the report.