Morgan Stanley, Goldman set biggest bonus bumps for Asia bankers as deal flows rebound
- Compensation for investment bankers was boosted by about 20 per cent at Morgan Stanley, 15 per cent at Goldman Sachs
- The increases for UBS, JPMorgan and Citigroup bankers in the region range from 3 to 10 per cent, according to people familiar
Spokespeople at Morgan Stanley, Goldman, UBS, JPMorgan and Citigroup declined to comment.
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More hiring of senior bankers and an increased headcount could also have raised the overall bonus pools, the people said. Bonuses for individual bankers will vary widely, with better payouts for those focusing on equity capital markets, health care and technology deals, the people said.
Total compensation for equities, fixed income sales and trading at Morgan Stanley also rose about 20 per cent, propelled by rising institutional client flows and a refocus on its rates, currencies and commodities trading in the region, one of the people said.
The pool earmarked for UBS’ global market division in Asia is likely to rise about 15 per cent, another person said. Bonuses at the Swiss bank will be announced internally before the Lunar New Year next month.
Average fees on deals for most global banks improved from the prior year, data complied by Bloomberg show. Morgan Stanley has been the top Asia-Pacific equities arranger since 2017. The firm’s regional revenue rose 32 per cent to US$6.75 billion, according to its earnings report.
The bank’s institutional securities business had a strong year, with growth in Asia a standout, Chief Financial Officer Jonathan Pruzan said on an earnings call last week.
Morgan Stanley also boosted the compensation of its chief executive officer, James Gorman, by 22 per cent to US$33 million last year as the bank posted its third consecutive year of record earnings.
Goldman bounced back to second in equity underwriting in Asia-Pacific in 2020 from seventh the year before. Its revenue in Asia rose 33 per cent to US$6.2 billion, while its global investment-banking revenue climbed 27 per cent as fees from equity underwriting nearly tripled. The bank’s stock traders delivered 40 per cent higher revenue, making up for fixed-income trading that fell short of analyst estimates.
On merger advisory, Morgan Stanley and Goldman also topped the league table across Asia, with 16 per cent and 14 per cent market share respectively, according to Bloomberg data.
JPMorgan and Citigroup ranked fifth and seventh arranging stock sales last year in Asia-Pacific. A Citigroup’s spokesman in Hong Kong said the firm had a record year for investment banking revenues in Asia, with a 16 per cent increase.
Even so, globally, the biggest US lenders are tempering expectations for employee payouts as workers across the world are reeling from the pandemic.
Bank of America Corp.’s plan to keep the bonus pool for sales and trading unchanged at last year’s level has disappointed some staff. Citigroup will leave the overall pot unchanged for equities, while boosting it for bond traders by at least 10 per cent. More generous increases approaching 20 per cent are under discussion at JPMorgan and Goldman, people familiar said in December.
Citigroup Inc. board is weighing a decision to reduce bonuses for a dozen of its top executives in its 15-member management team in an effort to appease regulators after it was dinged for failing to properly maintain risk management and internal systems, a person with knowledge of the matter said.
Citigroup Chief Executive Officer Michael Corbat said in an earlier interview that the bank needs to be mindful of the environment and the many challenges for people and certain businesses when considering payouts.
