Back to top

Image: Bigstock

JPMorgan (JPM) Plans for 20% Rise in 2020-end Trading Bonus

Read MoreHide Full Article

JPMorgan (JPM - Free Report) plans to boost year-end compensation for its sales and trading division by up to 20%, following an impressive trading performance during the year amid the pandemic. The news was reported by Bloomberg.

While this is in contrast to other Wall Street firms that are most likely planning to keep bonuses for traders flat compared to the previous year end, the 20% raise is not enough for JPMorgan’s traders, who were expecting heavy raises, given the company’s impressive trading performance.

During the first nine months of this year, the Wall Street biggie recorded a 54% rise in fixed income markets revenues, while its equity markets revenues improved 33%.

For the rest of the company, payouts are expected to decline and the average year-end bonus pool for JPMorgan will likely be lower than that in 2019. In fact, similar to Wells Fargo (WFC - Free Report) , which is planning to freeze raises for top earners, JPMorgan is planning to freeze raises for employees at the vice president level and above.

The move comes as the company is trying to focus on controlling expenses amid the coronavirus-induced uncertain economic environment.

However, for JPMorgan, the final payout is subject to change and will likely vary among desks depending on performance.

Notably, since the outbreak of the coronavirus in mid-March, trading revenues at almost all the major Wall Street finance companies improved significantly, driven by the substantial rise in market volatility along with higher client activity.

Thus, given the impressive trading performance, traders at Wall Street were expecting heavy raises this year.

However, on the expectation that the current scenario will likely persist in 2021, companies are not being very generous in deciding bonuses.

Despite recording impressive trading performance during the year, Bank of America’s (BAC - Free Report) senior executives are planning for year-end bonuses similar to the previous year. At the end of the first nine months of this year, BofA recorded total sales and trading revenues of $12.01 billion, increasing 21.2% year over year. Fixed income, currencies and commodities trading revenues improved 22.8%, while equity trading revenues increased 18%.

Likewise, Morgan Stanley (MS - Free Report) recorded a 39% year-over-year increase in total sales and trading revenues at the end of the first nine months of 2020.

Over the past six months, shares of JPMorgan have gained 19.2% compared with 17.7% growth recorded by the industry.

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>