PNC - Banks feel wage inflation as performance increases competition for talent rises

Wall Street banks use a pay-for-performance model that boosts employees' pay when the company's results improve. With M&A activity, underwriting businesses, and equities trading units thriving, by definition, compensation costs will rise. But inflation may also add to their costs as several banks hike pay for their lowest paid workers in bank branches and their younger investment bankers as they seek to retain talent. Management is discussing the issue in Q3 earnings calls. "Realistically, expenses are going to be up next year," JPMorgan Chase (NYSE:JPM) Jeremy Barnum said on the bank's Q3 earnings call. With the bank's strong performance in both its Banking and Markets units in the last couple of years, "we have seen increased compensation expense on the way up," he added. As that level normalizes in 2022, "you're going to see that come down in line all else being equal," Barnum said. "Labor inflation is definitely a

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Banks feel wage inflation as performance increases, competition for talent rises