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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is a former global head of equity capital markets at Bank of America and is now a managing director at Seda Experts
In the TV show Seinfeld, the Costanza family celebrates a secular year-end holiday called Festivus, featuring quirky traditions like the “Airing of Grievances” and the “Feats of Strength”.
For investment bankers, their equivalent arrives between mid-January and mid-February, when they are told their total compensation for the previous year.
When I started in banking in the mid-nineties, “comp day” rivalled any holiday in drama and intensity. Doors slammed, grown men (it was usually men) fought back tears, and impromptu champagne-soaked celebrations spilled into nearby bars. The whole floor crackled with raw emotion.
Today comp day typically unfolds with all the ceremony of a visit to the local post office. The modern banker is summoned to the boss’s office via an emailed calendar invitation. The manager, armed with a spreadsheet and HR-vetted talking points, delivers the news with the monotony of Ben Stein’s economics teacher in Ferris Bueller’s Day Off.
The script follows a precise formula. First comes the total compensation figure, followed by how it compares percentage-wise with last year. Then the manager breaks down the bonus (or “variable compensation” in formal terms) into its components: the immediate cash portion and the amount paid in restricted stock. The vesting schedule for the stock awards is explained in meticulous detail — which shares become available in which years. The manager also announces the base salary for the coming year.
The encounter concludes with a bland benediction — ranging from a metaphorical pat on the head about “recognising your contribution” to a gentle admonishment about “areas of development”.
The domestication of this ceremony can be attributed to various factors, not least the post-financial crisis regulatory reforms that turned banking’s bonus bonanzas into slow-drip compensation. Higher base salaries and the introduction of “role-based allowances” in Europe (to get around the EU bonus cap) mean the bonus often isn’t quite the make-or-break moment it used to be. The intense public scrutiny of banking compensation has also forced a kind of procedural sobriety.
Moreover, the elements of suspense and surprise have largely been eliminated. By the time January rolls around, performance reviews hint at the outcome, rumours of the comp pool’s year-on-year change circulate, and leaks outpace senior management’s efforts to contain them. Team leaders, meanwhile, manage expectations.
Of course, bankers still lobby, scheme and grovel before comp day, dutifully filling out online self-evaluations and inflating their achievements. With large, cross-department teams handling deals, revenue attribution remains highly subjective, making it easy to claim credit for work barely touched.
But it’s pretty tame stuff. Back in the heyday, one senior colleague gained notoriety by pitching leadership a 10-page PowerPoint deck, including a league table of only “his” deals to show how much worse the bank would’ve ranked without him. When the story spread, it sparked a mix of laughter, disbelief and grudging respect for the sheer gall. I doubt many today would have the chutzpah to pull a stunt like that.
Even reactions are now sanitised. Modern bankers know any overt display — jubilation or fury — can be weaponised against them. Land a great bonus? Feign mild disappointment; you don’t want the honchos reconsidering their generosity next year. Get stiffed? Offer a stoic nod and quietly request a follow-up conversation. The dramatic outbursts of yore are (mostly) relics, as antiquated as Gordon Gekko’s Motorola phone brick. When I led teams, no direct report ever raised their voice or betrayed more than a flicker of indignation, even when their “number” fell short.
Bankers know they’re privileged, earning far more than 99 per cent of the population. But their sense of entitlement isn’t about the absolute number — it’s about comparisons. Nothing stings more than sensing that a peer is taking home more. When their comp doesn’t measure up, the relative grievance turns into muffled bitterness.
Occasionally, you hear of a banker elsewhere who loses their temper after getting a “doughnut” (industry slang for zero) or a low bonus. These rare eruptions serve only to underscore how far we’ve drifted from the old Sturm und Drang.
This transformation reflects broader changes in investment banking, where the swashbuckling culture of previous decades has given way to something far more controlled and more conscious of optics and compliance. The annual bonus ritual has become another carefully managed corporate event, its rough edges smoothed by process, evolving office norms and institutional decorum.
So when you get your “number”, don’t slam the door on your way out — it’s against workplace conduct policy, and your employer might have grounds to claw back your unvested stock!
Read the full article here
