US giant JP Morgan Chase is set to unveil a multibillion dollar bonus pot when it kicks off the results season for Wall Street banks today.
The bank emerged as one of the main winners from the financial crisis, swallowing up failed rivals Bear Stearns and Washington Mutual in 2008.
In the first nine months of 2009, JP Morgan enjoyed profits of $8.45bn (€5.8bn), 72% ahead of a year earlier.
During the same period, the firm’s ’non-interest expenses’ – which includes pay and bonuses – jumped 25% to £40.3bn (€28bn), reflecting the increased size of the bank but also “higher performance-based compensation expense”.
The huge profits and bonuses – at a time of punishing recession for many Western economies – prompted moves to clamp down on the banks from politicians on both sides of the Atlantic.
Following Chancellor Alistair Darling’s tax on bank bonuses in December, President Obama unveiled his own tax measures for the sector yesterday to ensure that public support given at the height of the crisis is clawed back.
JP Morgan chief executive Jamie Dimon was one of four Wall Street bank bosses hauled before a US commission on Wednesday to probe the causes of the financial crisis.
In testimony to the commission, Mr Dimon said he believed “our compensation policies have been and remain appropriate”.
He added: “We will continue to pay our employees in a responsible and disciplined manner that allows us to attract and retain the best talent and reward their long-term, risk-adjusted performance.”
Although JP Morgan took $25bn (€17bn) from the US Government, the bank avoided the worst of the sub-prime meltdown and never posted a quarterly loss throughout the crisis. It since paid the money back.