JPMorgan to raise salaries, cut bonuses

JPMORGAN CHASE is to raise salaries and cut bonuses for more than 12,000 bankers around the world in a sign that financial groups are scrambling to defuse public anger at excessive pay while trying to avoid an exodus of talent..

The group told employees in its investment bank on Thursday night that it would increase salaries for those whose bonuses presently account for between 25 and 50 per cent of total pay.

The changes are expected to affect about half of the 25,000-plus staff at JPMorgan’s investment bank in Wall Street, the City of London and other financial centres.

The salary increases will be accompanied by corresponding cuts in bonuses to leave bankers’ compensation, and JPMorgan’s wage bill, unchanged.

The move, which mirrors decisions by Morgan Stanley, Citigroup and UBS, underlines the balancing act being performed by banks as they strive to devise a post-crisis compensation system.

Financial groups have had to respond to political pressure to reform their high-risk-high-reward culture without triggering a rush for the exit by bankers unhappy at their pay. Jamie Dimon, JPMorgan’s chief executive, last week complained about rising competition for top bankers.

Unlike Morgan Stanley and Citi, which increased salaries with immediate effect, JPMorgan’s bankers will not see the changes until January. – (Copyright The Financial Times Limited 2009)