Now that JPMorgan (JPM) has repaid TARP and Wall Street is booming again, it’s pay-hike time. After all, Citigroup (C) gave its employees broad-based salary hikes, and the house of Dimon has to compete for talent.
NYPost: While the final composition of those pay packages has not been finalised, sources familiar with the matter said part of Dimon’s calculus is determining how high to go with base salaries in order to remain competitive while at the same time avoiding the fat bonuses that have drawn ire from lawmakers and the public alike. The sources added Dimon in the end may not change workers’ compensation structure at all.
This is the kind of shift Obama (and the general public) would like to see, a move away from bonuses to salaries, in line with a general move towards boringness and steadiness — a Wall Street with less of a go big or go home mentality.
The problem is that boring and steady doesn’t describe the new Wall Street. Leverage is down, but they’re all the same old businesses with the same old people, only they’re more propped up and they all have more implicit guarantees. So while there’s interest in new pay structures, if it doesn’t happen (as the article suggests) it’s because the business models haven’t much changed, and the old scheme is that one that works.
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