Fixed income sales and trading jobs have long been some of the most remunerated in investment banks. This is still so: last month pay benchmarking firm Emolument put pay for fixed income traders up to 56% higher than pay for their equities counterparts.
However, as fixed income revenues have plummeted, the lot of fixed income traders is changing. Jobs have been cut; pay has been cut. J.P. Morgan and Goldman Sachs have approached the task with similar zeal.
Daniel Pinto, chief executive of J.P. Morgan’s investment bank, said this week that he's sliced headcount in the bank's fixed income trading division by 10% since 2011. Simultaneously, Pinto boasted that he's cut pay across J.P. Morgan's fixed income division by 25%.
Something comparable has been going on over at Goldman Sachs. COO Gary Cohn also said this week that headcount in Goldman's fixed income division is down 10% since 2012 and that pay has fallen ‘more than 20%’ over the same period.
In other words, if you haven't lost your job in fixed income at Goldman or J.P. Morgan, you've probably suffered a substantial diminution in your pay.
Bank of America has also been cutting trading headcount – and making up for lost time. CEO Brian Moynihan said this week that Bank of America has reduced headcount across its trading business by 10% in the past year alone. However, Moynihan made no mention of pay. He may have missed an opportunity here: if compensation figures from a recent court case are to be believed, Bank of America pays its fixed income traders and salespeople very well indeed.
Separately, Barclays is learning to live with Jes Staley's hiring freeze. Although Barclays has been known to break the freeze for a few key hires from J.P. Morgan, Euromoney says it's mostly holding firm and that Barclays is learning to make do with existing staff rather than hiring in new ones. For example, the head of Italian M&A, Pier Luigi Colizzi, was last month promoted to head of EMEA M&A, and Gavriel Lambert, a New York-based Barclays MD who once worked on the consumer team for UBS, was moved to Europe to head the EMEA consumer group. "We’ve had discipline forced upon us and the result is that we are making the most of the people we’ve got," one Barclays 'business head' told Euromoney.
Fixed income trading revenues are growing again. (Reuters)
Bank of America is working hard to cut jobs in the back and middle office of its trading business. (WSJ)
Credit Suisse is loading responsibilities onto existing staff: Simon Francis, a managing director in Credit Suisse's leveraged finance and high-yield syndicate business, is taking on added syndication responsibilities for investment-grade corporates. (Reuters)
Cactus Razi, a former head of European credit sales at Goldman Sachs, will be launching Elefant Markets, a San Juan, Puerto Rico-based company later this year. (Business Insider)
Dominique Jooris, managing director and head of credit capital markets for Asia Pacific ex-Japan, has left Goldman Sachs. (Reuters)
In place of numbers, employees at Morgan Stanley will now be asked to list up to five adjectives that describe the colleagues they're evaluating. (NY Times)
Point72 is so desparate for talent it's flying Cambridge University students to the East Coast to meet its recruiters. (CNBC)
1,250 jobs could go in the merger between the LSE and Deutsche Boerse. (CNBC)
Beware the securitization of Chinese banks' debts. (The Bear Traps)
Tarzan’s guide to elliptical style for effective business writing. (McSweeney's)
Modafinil did give me a peculiarly strong desire to get stuck into work. (Vice)