JPMorgan's bonus pot shrinks 4% as it pays off billions in fines

But the Wall Street giant's bankers will still average pay deals of £126,000

The bonus pot at JPMorgan shrank by 4 per cent last year after the investment banking giant was hit by flat profits and the bank overall had to pay out billions of dollars in fines.

Average pay and bonuses for its investment bankers still dwarfed those of most other industries, however, with the average worker making $207,000 (£126,000) a head, around $10,000 lower than in 2012. Within that number would be some earning millions of dollars.

Employees will be finding out how much they are getting individually over the next fortnight. Other Wall Street banks, led by Goldman Sachs, will also be telling their staff how much they earned in the coming days and weeks. General expectations are that bonuses will be flat or down on a year ago, although a small coterie of top bankers will get rises of up to  15 per cent, headhunters predict.

The size of JPMorgan’s pay pot emerged in annual and quarterly financial results which showed a 7.3 per cent decline in net income, dragged down by legal costs during the quarter in connection with former client Bernie Madoff’s ponzi scheme. Net income in the fourth quarter fell to $5.3bn, on revenue of $24.1bn.

The Wall Street giant has agreed to pay $2.6bn to US authorities and Madoff victims to settle claims. The financier is currently serving a 150-year prison sentence for fraud. US Attorney Preet Bharara, who oversaw the investigation, said the bank had “failed miserably” as an institution in the Madoff case. JPMorgan had a 20-year relationship with Madoff before his arrest in 2008.

In a statement, chairman and chief executive Jamie Dimon, said: “We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter.

“We reached several important resolutions – Global RMBS, Gibbs & Bruns, and Madoff. It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward.”

Over the past year, JPMorgan has paid about $20bn to settle investigations into its activities and already set aside $9.3bn in the previous quarter to cover such payouts. It said yesterday that it would set aside a further $850m in case that was not enough.

As well as the Madoff scandal, JPMorgan, once the darling of Washington DC, has faced down the “London Whale” trading fiasco, which saw it lose $6bn; November’s record $13bn settlement with US authorities over the sale of mortgage securities; and, coming up, a bribery investigation into its so-called “sons and daughters” hiring practices in China, where it is alleged to have recruited the offspring of the country’s powerful rulers.

However, it remains the biggest player in investment banking, raking in more fees than any rival last year as it worked on the Suntory takeover of GlaxoSmithKline’s drinks brands, the sale of Vodafone’s stake in Verizon, the Twitter flotation and the Lloyds shares sale.

Goldman Sachs reports profits tomorrow.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

SThree: Graduate Recruitment Consultant

£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there