London: World’s biggest banks will pay out more than $65 billion in salaries and bonuses over the next fortnight, with banking conglomerate JP Morgan Chase alone likely to shell out a record $29 billion, barely a year after the bailout of the banking system.
“JP Morgan Chase is set to defy calls for constraint over bankers’ bonuses this week when it delivers an expected $29 billion compensation pot for its executives,” the Sunday Telegraph reported.
JP Morgan’s 220,861 employees are on average set to earn $131,300 for the year, against $100,000 in 2008.
However, top performers in its investment banking arm will be much more highly remunerated.
Quoting analysts, the report said the world’s biggest banks will pay more than $65 billion to their staff over the next fortnight despite efforts by governments in Europe and the US to restrict excessive remuneration.
“The investment bank’s (JP Morgan Chase) refusal to rein back bonuses is likely to be seen as an act of defiance both by the US and the UK governments,” the newspaper said.
Chancellor Alistair Darling had previously told the Sunday Telegraph that “bonuses have been a symptom of the excessive behaviour of some banks over the last few years and even over the last few months.”
Wall Street’s year-end bonus season is likely to re-ignite fears that the financial services sector wants to go back to “business as usual” and has put behind it its role in bringing the global economy to the brink of a major depression.
JP Morgan had received $25 billion of capital from the US Treasury’s Troubled Assets Relief Programme (TARP).
Citing Andrew DeSouza, of Sifma, the US investment banking body, the report said, “while the numbers will appear big, the story behind those numbers reflects changes many companies have made. These include a kind of ‘pay for performance´ that more closely links compensation practices to the long term success of the company.”