If big bonuses mean big business, New York Attorney General Andrew Cuomo's report on compensation last week underlined the strength of JPMorgan Chase & Co. in capital markets.
JPMorgan Chase had 1,144 employees who earned more than $1 million in bonuses last year, far more than any of the other big banks that had been given capital from the Treasury Department's Troubled Asset Relief Program. Goldman Sachs Group Inc. paid bonuses of $1 million or more to 953 employees; Bank of America Corp. and its Merrill Lynch & Co. combined paid such bonuses to 868; and Morgan Stanley had 428 with bonuses of $1 million or more.
The big bonus pool at JPMorgan Chase is just the latest manifestation of how the banking company has solidified its investment banking and asset management businesses.
Those two divisions, which helped themselves by helping competitors raise capital, have generated a profit of nearly $8 billion so far this year — almost twice the net income of Goldman. In 2006, JPMorgan Chase earned $5 billion with investment banking and asset management.
JPMorgan Chase, long a dominant player in fixed income, has had to catch up in recent years in the equities and commodities businesses. In global equity underwriting, it ranked No. 1 last year, up five places from its 2006 showing, and pushed Goldman from the top position to No. 2, according to Dealogic. JPMorgan Chase improved in debt underwriting, from No. 3 in 2006 to No. 1 last year, replacing Merrill Lynch. And throughout the financial crisis of the past year, JPMorgan Chase maintained its top position in the syndicated loan market.
At the end of 2008, JPMorgan Chase had a staff of 43,277 in capital markets, dwarfing Goldman Sachs' head count of 29,182. Morgan Stanley, with its vast retail brokerage business, employed 45,653.