Not so long ago, we all thought banks were going to increase salaries very dramatically. In March, for example, Citigroup and Morgan Stanley were said to be contemplating raising salaries above $200k, UBS reportedly increased base pay to 300k for managing directors, and Bank of America, was said to be contemplating upping its base by 70%.
Two months on, and the landscape looks rather different. Not only has it emerged that UBS is increasing most people’s salaries by a mere 10-15%, but Bank of America doesn’t appear to be increasing pay after all.
Dealbreaker reports that BofA has put the 70% plans on ice because of ‘negative press.’ It probably doesn’t help that BofA’s payroll dept reportedly made an unfortunate mistake, telling some people that their salaries were being doubled, and then telling them that they weren’t.
The head of HR at another US firm says they’ve got no plans to increase salaries this year. “When all the stuff about taxing bonuses at 90% came out, we thought we’d have to change the mix and start making salaries more important. But that seems to have gone away and is dying a slow death,” he said.
However, compensation consultants say we may not have seen the last of salary increases. Jon Terry, head of the reward and compensation practice at PricewaterhouseCoopers, says another major US house has already made the decision to increase salaries and will be announcing it very soon.
Wall Street pay consultant Alan Johnson, says that even if banks don’t increase salaries this year, it’s the right thing to do and rises are inevitable sometime in the not too distant future. “Salaries in the industry are chronically low and a detriment to doing business,” he says.