JPMorgan Chase & Co plans to freeze salaries for most employees with titles of vice president and above even as it expects to increase bonuses for some traders as much as 20%, according to a person familiar with the matter.
The plans come as bank executives grapple with next year’s budgets and consequences of the COVID-19 pandemic, which include low interest rates and higher costs for loan losses even as trading revenue has surged.
As part of the incentive pay for traders, bonuses increase when market revenue rises. Wall Street firms routinely report higher compensation costs for traders after markets have been strong.
“Traders obviously had a very good year and you would expect them to be up,” the source said.
At the same time, the bank has been keen to show that it is holding the line on expenses broadly. “The bank’s bonus pools this year are generally down,” the person said.
The decisions were first reported by Bloomberg News.
Payout expectations for traders could still change with results in December.