The bonus whispers have begun. If they're to be trusted, JPMorgan traders can expect a 20% rise in bonuses but JPMorgan bankers can't, and 'flat will be the new up' at Bank of America.
One bank, however, has moved beyond the whisper stage. Today is fourth quarter results day at Royal Bank of Canada, and we know for sure that the overall bonus pool at the Canadian bank is up by around 5%.
RBC allocated CA$6bn (US$4.6bn) to variable compensation across the bank for 2020, up from CA$5.7bn for 2019.
In RBC's capital markets business, which includes investment bankers, salespeople and traders and support staff, the message on bonuses also looks promising. Overall compensation (salaries plus bonuses) per head at RBC capital market rose from CA$339k last year to CA$348k this year.
Most significantly, though, the bank increased the value of the 'capital markets compensation plan awards' it granted this year by a very healthy 23%, to CA$442m.
Will RBC capital markets employees be happy with their windfalls? Maybe, although fixed income traders' expectations might be hard to meet given this year's 50% increase in their revenues compared to 2019. One insider at the bank said that most people in capital markets will be paid flat, suggesting the increase in the bonus pool will be very targeted towards top performers.
What's also notable today is that - as at Barclays - this year's strong performance hasn't prevented RBC capital markets from cutting staff. In the fourth quarter, headcount at the unit fell by 290 people, a drop of 6%. It's a reminder that bonus pools are meaningless if you're no longer around when they're handed out.
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