Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.'s investment bank, survivors of the worst financial crisis since the Great Depression, are prepared to pay record bonuses for this year.
The companies — the three biggest banks to quit the Troubled Asset Relief Program — are to hand out $29.7 billion in bonuses, according to analysts' estimates. This would be up 60% from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, averages $250,400 each, almost five times the $50,303 median household income in the United States last year, according to data compiled by Bloomberg.
The three companies, under pressure from regulators to tie pay to long-term results, will award more in stock and defer more cash payments, compensation experts said. They may still face public wrath over the size of bonuses after the government injected capital into all the major financial institutions after the September 2008 collapse of Lehman Brothers Holdings Inc.
