Dive Brief:
- Bank of America is joining peers like Wells Fargo, Citi, Morgan Stanley and JPMorgan Chase in raising base pay for entry-level bankers to $100,000, according to a memo seen by Bloomberg.
- Focus over junior banker pay ramped up in March, when a self-survey from 13 Goldman Sachs analysts went viral, detailing "inhumane" 100-hour workweeks, deteriorating physical and mental health and a souring outlook for the future.
- This marks the Charlotte, North Carolina-based bank's second increase in base pay in a year. Bank of America doled out $10,000 raises for analysts, and $20,000 for associates and vice presidents in April, kick-starting a cascade of pay raises for junior bankers across the industry.
Dive Insight:
This second round of pay raises, which Bank of America announced Thursday, boosts base pay for junior bankers from $95,000 to $100,000 to match several competitors and to "[foster] an environment where you can build a long-tenured career." The increases take effect Feb. 1 for first-year analysts "in the global corporate and investment-banking, global-markets and global-research divisions."
Fears of burnout are on the rise for junior bankers, as the pandemic has spawned a major upswing in dealmaking workloads and many employees are required to return to the office despite challenges posed by COVID-19's delta variant.
Bank of America CEO Brian Moynihan refuted the idea that the firm is experiencing difficulty retaining its junior bankers, in a July interview with Bloomberg TV. Moynihan said the "turnover rate in the company is basically what it’s been traditionally."
Meanwhile, competitors have raised base pay to junior bankers to $100,000 and beyond. Goldman Sachs leads the pack in terms of compensation, hiking pay for first-year analysts to $110,000 this month.
But some banks are doing more than throwing money at the problem. For example, Citi CEO Jane Fraser instituted hybrid work policies and introduced Zoom-free Fridays.
Reuters reported Bank of America will only allow vaccinated employees to return to their offices. However, so far the bank has stopped short of outright mandating vaccines for its workers.
Moynihan told Bloomberg TV that Bank of America employees were given a choice to come back to the office in July, August or September. In the second quarter earnings presentation, the company reported that 85% of offices were open.
