Priya PatelTLDR: Bank of America has decided to keep bonuses for its dealmakers at the same level as last year, while some of its competitors have reduced variable compensation. The bank has focused on controlling costs but has also attempted to reward high-performing employees more than in previous years.
Bank of America has chosen to maintain its dealmaker bonuses at the same level as the previous year, in contrast to other Wall Street banks that have made cuts to variable compensation. Sources familiar with the matter have reported that bonuses for junior and senior dealmakers at Bank of America were flat for 2023. However, it has been noted that the bank has favored higher performers more than in previous years, when bonuses were distributed more evenly.
Bank of America’s decision to keep bonuses steady may be an attempt to retain talented dealmakers and maintain a competitive edge. While the bank has focused on controlling costs, it also recognizes the importance of rewarding high-performing employees. By maintaining bonuses at the same level, Bank of America is sending a message that it values its dealmakers and wants to incentivize their success.
This strategy differs from that of other Wall Street banks, which have implemented cuts to variable compensation amidst economic uncertainty and industry-wide pressures. These banks may be looking to reduce costs and manage risk in the face of changing market conditions.
Bank of America’s decision may also reflect its overall financial performance. If the bank had experienced a particularly successful year, it may have felt more confident in maintaining bonuses at the same level. Alternatively, if the bank had faced challenges or underperformed, it may have been more inclined to implement cuts to variable compensation.
Overall, Bank of America’s choice to keep dealmaker bonuses flat for 2023 demonstrates a balanced approach to managing costs and retaining talent. While the decision may differ from that of its competitors, it aligns with the bank’s own priorities and financial performance. By rewarding high-performing employees, Bank of America aims to incentivize continued success in its dealmaking division.
