After 2020 prompted layoffs, pay cuts, and financial restraint, Bank of America is leading the pack in restoring bonuses for investment bankers. Bank of America executives are planning a 40 percent increase in the bonus pool for its sales and trading bankers, and the other major players are expected to follow suit. This follows last year’s bonuses that flatlined despite a 20 percent rise in overall revenue; the bank understands the need to reward strong performance, especially in a volatile labor market. It can be seen as both a proactive move to protect its human assets, as well as a reaction to better-than-expected returns.
The bonus increase reflects a significant pandemic comeback for BoA and the rest of the major financial institutions in 2021. JPMorgan Chase and Goldman Sachs have also laid out plans to enhance their bonus pools for investment bankers by up to 40-50 percent. According to a report from pay consulting firm Johnson Associates, Wall Street bankers and traders are also anticipating bigger bonuses — the largest since the Great Recession. 2021 saw a record number of IPOs, including a surge in special purpose acquisition companies (SPACs). In addition to rewarding its investment bankers, BoA is giving increased bonuses to its fixed-income and equities sales and trading units, as revenues were up in both divisions.