Wall Street slashes bankers’ bonuses for 2022—will the rest of corporate America follow suit?

Anyone counting on using their end-of-year bonus to put in a swimming pool or pay for dental work may soon find themselves dejectedly pounding the eggnog, Clark Griswold-style. We’re not saying HR teams are enrolling their employees in a one-year membership to the jelly-of-the-month club quite yet, but if the current Wall Street commotion is any indication of broader trends, this year’s bonus may be…boneless.

What’s happening? Some Wall Street execs are reportedly considering cutting bonuses as they close out a year that saw investment revenue decline by 47%, or $18.8 billion, across the five biggest banks in its first nine months. JPMorgan Chase, Bank of America, and Citigroup, the Financial Times reported, may slash their bonus pools by 30%, while Jefferies CEO Rich Handler and president Brian Friedman recently told staff, “This is going to be a more difficult compensation season.” Goldman Sachs is expected to reduce its traders’ bonuses by “a low double-digit percentage,” according to Bloomberg, even as its annual trading revenue is on track to grow by 15% to over $25 billion this year.

Sad trombone or tiny violin? Is this just a Wall Street problem? Not exactly. The poor lawyers are suffering, too. Across town, prominent law firms including Davis Polk & Wardwell are matching 2021 bonuses, rather than giving even bigger bonuses, as they’ve been known to do in years past, Reuters reported. (They must really be regretting not majoring in philosophy like their parents told them to.)

WYD? We asked HR Brew readers if their organizations have done away with year-end bonuses for 2022. While 58% told us they’re proceeding with business as usual, 24% said there’s just no room in the budget, and 18% said they are rethinking or reducing them.

If your organization falls into one of the latter two camps, you might want to let your employees know sooner rather than later so they can plan accordingly—every family has a Cousin Eddie who will try to take matters into their own hands.—VV

Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @VickyValet on Twitter. For completely confidential conversations, ask Vicky for her number on Signal.