JPMorgan Bonuses to Be Slashed 30% to 50%
In a sign of what is expected to be a dismal year for Wall Street bonuses, CNBC has learned this year's bonuses at JPMorgan Chase will be down 30 percent to 50 percent. The news was relayed to the managing directors of the firm's investment bank in a call to review the company's third quarter earnings.
The news is hardly surprising. Investment banking activity has dried up this year. According to Thomson Reuters, through October 10th, mergers and acquisition activity was down 29 pecent from the same time last year, IPOs were down 24 percent, and debt underwriting was down 27 percent. Add to that the S&P 500 is down 35.5 percent year to date and it doesn't bode well for Wall Street's bonus pool.
The co-heads of the JPMorgan's investment bank Steve Black and Bill Winters relayed the news to senior management after thanking them for the hard work they have done in the past year.
It's a year that has thrust JPMorgan into the spotlight. The firm was called on by the government to save former rival Bear Stearns, and it did so in May buying it for $10 a share, with the Federal Reserve funding $30 billion of Bears illiquid assets.
Last month, JPMorgan bought most of the assets of Seattle-based Washington Mutual for $1.9 billion in a deal brokered by the FDIC.
In the latest quarter, JPMorgan's third quarter profit fell 84 percent, still earnings of $0.11 a share were better than expected. Unlike rival Citigoup, which has posted four straight quarterly losses, JPMorgan's weathered the credit crisis far better, posting only one quarterly loss since the credit crisis began in August of last year.
A spokesman for JPMorgan declined to comment.