Bank of America is boosting pay for junior bankers, becoming the latest bank to reward junior investment bankers for putting in long hours to meet the challenges of booming capital markets in the face of a pandemic that has shattered the work and life balance.
In an internal memo from the global corporate investment banking executive committee, the bank notified junior bankers in the GCIB that salaries would be increased effective May 1 in recognition of the commitment and contributions of junior bankers to the continuous success of its deal team and client relationships.
“This is yet another example of our decade-long commitment to enhance the junior banker experience and to maximize the development of our juniors and promote long-tenured careers at our firm,” the memo said.
It was the latest move by a large bank to acknowledge that working from home during a historic peak in activity for capital markets has increasingly meant working overtime—sometime excessive overtime—pushing several bakers to the brink.
Last month, several Goldman Sachs analysts went public with a presentation to management saying long work hours were hurting their physical and mental wellbeing and most were unlikely to stay beyond six months if conditions did not improve.
Goldman CEO David Solomon responded by highlighting a rule that bankers should not work on a Saturday and speeding up efforts to ease the workload. While Goldman's bankers complained the loudest the struggle is being felt by bankers at nearly all banks.
"Everyone knows junior bankers work hard, but it's clearly been exacerbated by the pandemic and how busy it's been. It's combined to create a pinch-point, which I think has been across the Street," a person at one major banks said.
Banks say they have stepped up their hiring of junior staff to meet the increased workload, but that can take time, especially as it has to happen remotely and when rivals are also in the market, bankers said.
Other banks have offered one-time bonuses for junior and some mid-level investment bankers of US$20,000, salary bumps and for vice-presidents, associates and analysts in its capital markets and advisory division.
Jefferies offered junior bankers special gifts ranging from Peloton exercise bikes to a package of Apple products including iPad Airs.
At BofA, the salary increase is part of program to enhance the junior banker experience, including investments in technology to drive efficiencies, reducing pitch book and client commitment memo lengths, and a commitment to the management of workload and balance, protected weekends, vacations and tracking work hours.
During the next six weeks BofA will run small group check-in series to allow managers to receive input from junior bankers on how to provide targeted resources and support, ensure health and wellness.