Investment Bankers Brace For Lower Compensation Amid Lower Deal Making Activity

  • 2022 was not a good year for investment banking, as a slump in deals led to declines in fees and revenues at all major institutions.
  • Due to the challenging economic environment, several Wall Street banks resorted to cutting jobs to manage costs.
  • Related: A Week After Morgan Stanley Layoffs, Goldman Sachs Axes 4,000 Jobs.
  • Recruiters expect year-end bonuses for bankers in New York and London to be 30% to 50% lower, while some may receive none.
  • This year, the pace of mergers and acquisitions and stock offerings slowed significantly as debt financing markets collapsed and stock market volatility hurt valuations. 
  • For U.S. managing directors at Goldman Sachs Group Inc GS, compensation for 2022 might fall 40% - 45% on average, Reuters reported citing data by Sheffield Haworth, a recruitment firm for top executives.
  • At rival banks, including Morgan Stanley MSJPMorgan Chase & Co's JPMCitigroup Inc C, and Bank of America Corp BAC, the average pay for senior bankers is expected to fall between 30% - 40%.
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