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FT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.
The author is the former Global Head of Equity Capital Markets at Bank of America and currently a Managing Director at Seda Expert.
On the TV show Seinfeld, the Costanza family celebrates a secular end-of-year holiday called Festivus, which features quirky traditions such as “voices of grievance” and “feats of strength.”
For investment bankers, comparable compensation will arrive between mid-January and mid-February, when you will be informed of the previous year’s total compensation.
When I started working at a bank in the mid-’90s, “Comp Day” rivaled any other holiday in terms of drama and intensity. Doors slammed, grown men (mostly men) fought back tears, and nearby bars erupted in impromptu champagne-soaked celebrations. The entire floor crackled with raw emotion.
Today’s Comp Day usually revolves around the ritual of a visit to the local post office. Modern bankers are called to their boss’s office through a calendar invitation email. Armed with spreadsheets and HR-vetted key points, this manager delivers the news with the monotony of Ben Stein’s economics teacher in Ferris Bueller’s Day Off.
The script follows a precise formula. Total compensation is displayed first, followed by a percentage comparison with the previous year. Managers then break down the bonus (in formal parlance, “variable compensation”) into its components: the immediate cash portion and the amount paid in restricted stock. Stock award vesting schedules are meticulously explained as to which shares are available in which years. Managers will also announce their base salary for next year.
The encounter ends with a bland congratulations, ranging from a figurative pat on the head to “value your contribution” to a gentle admonishment about “areas of development.”
This ritual has become entrenched due to a variety of factors, most notably the post-financial crisis regulatory reforms that turned bank bonuses into lax rewards. In Europe, with higher base salaries and the introduction of role-based pay (to circumvent the EU’s bonus cap), bonuses are often no longer as much of a difference-maker as they once were. Intense public scrutiny of bank compensation has also forced a kind of procedural abstinence.
Furthermore, the elements of suspense and surprise are largely eliminated. By the time January rolls around, performance reviews hint at the results, rumors about year-over-year changes in comp pools spread, and leaks outpace management efforts to contain them. Team leaders, on the other hand, manage expectations.
Of course, bankers still lobby, plan, and hang around before competition day, dutifully filling out online self-assessments and touting their accomplishments. With large cross-functional teams handling transactions, revenue attribution remains highly subjective, making it easy to claim credit for work that is largely untouched.
However, it’s quite a modest content. Back in his heyday, one senior colleague gained notoriety by pitching leaders a 10-page PowerPoint deck containing a standings chart of only “his” trades, showing how badly the bank would have ranked without him. When the story spread, I felt a mixture of laughter, disbelief, and a grudging respect for pure bile. I don’t think many people today would be stupid enough to pull off a stunt like that.
Reactions are also now sanitized. Modern bankers know that overt behavior – glee or anger – can be used as a weapon against them. Would you like to receive an amazing bonus? Feign mild disappointment. We don’t want chiefs to have second thoughts about their generosity next year. Do you get stiff? Nod calmly and quietly request a follow-up conversation. The once dramatic explosion is (mostly) a relic, as outdated as Gordon Gekko’s Motorola phone. When I was leading a team, none of my direct reports ever raised their voice or betrayed me with just a hint of resentment, even if I didn’t have enough numbers.
Bankers know that they are privileged and earn far more than 99 percent of the population. However, their sense of entitlement is based on comparisons, not absolute numbers. Nothing stings more than feeling like your peers are bringing home more. When their satisfaction is not met, relative dissatisfaction turns into muffled bitterness.
Every once in a while, you’ll hear stories of bankers throwing tantrums after getting a “doughnut” (industry slang for zero) or a low bonus. These rare eruptions only emphasize how far we are from the Sturm und Drang that once was.
This transformation reflects a broader shift in investment banking, with the adventurous culture of past decades giving way to one that is far more controlled and more aware of optics and compliance. The annual bonus ceremony has become another carefully managed corporate event, its rough edges smoothed out by process, evolving office norms, and organizational decorum.
So, once you receive your “number”, don’t slam the door when you go out. This is against workplace conduct policies and the employer may have grounds to take back unvested shares.
