JpMorgan and Goldman, bonus caps off: British bankers up to 25 times salary

Goodbye austerity. London bankers' bonuses will be up to 25 times their salary. JpMorgan joined rival Goldman Sachs Group Inc. in abolishing a cap on variable remuneration components for London-based human resources.

The move will allow bankers at JPMorgan, in particular, to earn a bonus equal to 10 times their base salary, according to international news agencies yesterday. The move, compared to the current limit that limits some employees' bonuses to two times their fixed salary, comes after the UK government last year raised its cap on bankers' bonuses.

"We believe we have developed one of the most attractive and balanced compensation structures in the industry," a JPMorgan spokesperson said in a note. "Fixed compensation will remain very competitive and we will have ample room to appropriately reward top performers."

Amidst the chaos of caps and counter-capping, banks have warned that there will be challenges in adapting to a world without a cap on bonuses because many financial firms have already overhauled their remuneration structures and granted their bankers higher fixed salaries to circumvent the cap.

For the time being, JPMorgan has no plans to substantially change the fixed remuneration of British employees. This is a fairly popular measure for the bank's employees, who look favourably on greater stability in managing their monthly expenses. Of course, it is not certain that a higher base salary corresponds to a higher final remuneration: Goldman allows its top traders and brokers in the UK to earn bonuses of up to 25 times their base salary.