Reuters - Video

EDITION: U.S. | U.K. | IN

Business

Profit jumps, pay cuts at JPM, Goldman

Wednesday, Jan 16, 2013 - 02:07

Jan. 16 - Quarterly profits nearly tripled at Goldman Sachs and net income at JP Morgan Chase jumped 53 percent, but job cuts and lower compensation are still becoming a fixture for Wall Street. Bobbi Rebell Reports.

▲ Hide Transcript

View Transcript

Banks are cashing in again- but trimming down the fat paychecks. Goldman Sachs out with a blowout quarter- beating estimates on both the top and the bottom line. Fred Cannon, Director of Research at Keefe Bruyette and Woods: SOUNDBITE: FRED CANNON, DIRECTOR OF RESEARCH, KEEFE BRUYETTE AND WOODS (ENGLISH) SAYING: "Goldman Sachs demonstrated that they could earn a lot more than expected in the 4th quarter and especially we saw very good capital markets activity, especially on the debt side." They are making more money from their own trading account and investment banking, and they are paying out less money to their own people. That's been a boost for shareholders- who sent Goldman stock higher on Wednesday. Morningstar banking analyst Dan Werner: SOUNDBITE: DAN WERNER, BANKING ANALYST, MORNINGSTAR (ENGLISH) SAYING: "Compensation expense accrual was much lower in the quarter. Normally they accrue 40-45 percent of revenues for compensation expense during the first three quarters and then the last quarter they accrued about 21 percent." JP Morgan beat forecasts- thanks to strength in commercial and consumer loans- but CEO Jamie Dimon had his pay cut in half, to a mere $11.5 million. The board - saying he should have had a better handle on the business that led to the $6.2 billion so-called London Whale trading loss. There is a new attitude towards compensation on Wall Street. In addition to the compensation curbs at Goldman and JP Morgan- Morgan Stanley is giving some of its workers I.O.U.s -deferring their bonuses. The idea- discourage excessive risk taking by tying performance to medium term results. It also makes it easier to claw back pay if things go wrong. SOUNDBITE: DAN WERNER, BANKING ANALYST, MORNINGSTAR (ENGLISH) SAYING: "I think the culture has changed slightly but you know overall this is Wall Street and it's a financial center and people are going to be expected to be paid for good work and I'm not saying that they didn't do good work this year, it's just at a lesser volume than maybe in past years." And with new regulations coming soon and tight fisted employers- those who don't get pink slipped- may look to go looking elsewhere to make their fortune.

Profit jumps, pay cuts at JPM, Goldman

Wednesday, Jan 16, 2013 - 02:07

Money »

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

We've become a promotional culture-RetailMeNot's Bodge We've become a promotional...

Thu, Aug 14, 2014 - (4:39)

Dow back to positive territory for year Dow back to positive territory for year

Wed, Aug 13, 2014 - (2:18)

Markets cheer Russia's Ukraine exit Markets cheer Russia's Ukraine exit

Fri, Aug 08, 2014 - (1:50)

Russia, Iraq push Dow to three-month low Russia, Iraq push Dow to three-month low

Thu, Aug 07, 2014 - (2:27)

Wall Street gains but telecom disconnected Wall Street gains but telecom disconnected

Wed, Aug 06, 2014 - (2:28)

Stocks zapped by energy weakness Stocks zapped by energy weakness

Tue, Aug 05, 2014 - (2:46)

Stocks recover with refocus on earnings Stocks recover with refocus on earnings

Mon, Aug 04, 2014 - (2:19)

The S&P 500 suffers worst week in 2 years The S&P 500 suffers worst week in 2 years

Fri, Aug 01, 2014 - (2:41)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, May 30, 2014 - (1:37)

The week that changed Boston The week that changed Boston

Mon, Apr 14, 2014 - (3:28)