JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) is removing the EU bonus cap for its London-based employees, following Goldman Sachs’ recent pay structure changes post-Brexit, according to Sky News.
The bank reportedly notified staff on Wednesday that it would maintain parts of the remuneration packages established after the European Union’s 2014 cap on variable pay, which limits bonuses to twice the fixed salary.
Sources told Sky that JP Morgan, employing 22,000 people in the UK, with 14,000 in London, will raise the bonus cap from two times to ten times fixed pay. This change allows senior bankers earning £2 million annually to be eligible for bonuses up to £20 million, rather than £4 million under the EU rules.
A JP Morgan spokesperson told the news outlet: "We believe we have developed one of the most attractive and balanced pay structures in the industry." They assured that fixed pay would remain competitive, with ample room to reward high performers.
The bank's analysis suggests that the removal of the EU bonus cap will not significantly impact total annual pay during the current financial year. Bonuses will remain performance-driven and discretionary.
The moves by JP Morgan and Goldman are expected to prompt other banks to follow suit to stay competitive in attracting top talent.