Pay for most senior investment bankers at Wall Street firms in Asia dropped to the lowest level in almost two decades, according to people familiar with the matter, as a dearth of deals in China and Hong Kong hammered the industry.
Total compensation for many senior bankers in Asia ex-Japan fell to US$700,000 ($937,765.50) to US$800,000, well below the US$1 million or more they have typically earned since the turn of the millennium, the people said, asking not to be identified discussing private matters. At least 20% of managing directors at banks, including Morgan Stanley and UBS Group AG, received no bonuses last year, the people said.
Pay is crumbling in part as firms seek to cut expenses amid one of the worst deal droughts ever seen, fueled by rising political tension and a crackdown on private enterprise in China. Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. have made several rounds of job cuts in Asia over the past 18 months as stock sales and mergers tumble. Asia stock offerings outside Japan plunged 30% last year, compared with a 45% jump in the US, according to data compiled by Bloomberg.
Bank of America Corp. cut more than 20 investment-banking jobs in Hong Kong this week, people familiar with the matter said. UBS cut about two dozen investment bankers in Asia, mainly China-focused roles in Hong Kong, Bloomberg reported in October. JPMorgan slashed about 30 Asia dealmaking jobs earlier in the year.
The deals slump was reflected in compensation, with only a handful of top performers from each bank in Asia paid as much as $1.5 million. That’s about 20% less than what star bankers took home in 2022, and half the amount from 2021, the people said. Overall, total compensation for managing directors fell 20% to 25% across Asia, the people said. The decline in bonuses was more pronounced than the base-pay component.
Spokespeople at the banks declined to comment on the pay.
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The range of compensation across Asia, excluding Japan, varied depending on the country and business line. A high-performing equity capital markets head, for example, may have been paid in the range of US$1.2 million to US$1.5 million, one of the people said.
Resources and infrastructure bankers in Australia, some senior dealmakers in India and Korea and those focus on mergers and acquisitions fared better. China-focused bankers were among the biggest cohort that didn’t get bonuses, the people said.
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Across Wall Street, executives have warned of meagre bonus pay jumps for traders. At JPMorgan, the overall bonus pool for its legion of traders will be close to flat compared with 2022, a person familiar with the matter said last month. That’s similar to Citigroup, in the midst of its biggest restructuring in decades, where the pool will likely be little changed if not slightly down. Goldman Sachs and Bank of America are looking to sweeten payouts by at least a few percentage points for many of their traders, other people said.
In Europe, Deutsche Bank AG and Societe Generale SA are planning to reduce the overall amount of variable compensation they will pay out for 2023 after a tough year. Staff in some units that performed well may still receive higher bonuses, but the overall pot will drop, people familiar with the matter have said, without saying how big the cuts will be.
