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Roula Khalaf, editor of the FT, picks her favorite 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 a TV show Seinfeldthe Costanza family celebrates a secular holiday at the end of the year called Festivus, which includes unusual traditions such as “Airing of Grievances” and “Feat 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 banking in the mid-nineties, “accounts day” could be compared to any holiday in terms of drama and intensity. Doors slammed, grown men (they were usually men) choked back tears, and impromptu champagne-soaked celebrations spilled into nearby bars. The whole floor crackled with raw emotion.
Today’s work day is usually done with all the ceremony of a visit to the local post office. The modern banker is invited to the boss’s office via an e-mailed calendar invitation. The anchor, armed with a spreadsheet and HR-vetted talking points, delivers the news with monotony of economics professor Ben Stein in Ferris Bueller’s day off.
The script follows a precise formula. First comes the total compensation figure, followed by a percentage comparison with last year. Then the manager breaks down the bonus (or “variable compensation” in the formal sense) into its components: the current cash portion and the amount paid in restricted stock. The vesting schedule for share awards is explained in detail – which shares become available in which years. The manager also announces the basic salary for the next year.
The meeting ends with a gentle blessing – ranging from a metaphorical pat on the head about “recognizing your contribution” to a gentle admonition about “areas of development”.
The domestication of this ceremony can be attributed to a variety of factors, not least the post-financial crisis regulatory reforms that turned bank bonuses into slowly declining compensation. Higher basic wages and induction “role-based fees” in Europe (for a tour EU bonus limit) means that the bonus is often not as timely as it used to be. The intense public scrutiny of bank fees has also forced a kind of procedural sobriety.
Moreover, the elements of suspense and surprise are mostly eliminated. By the time January rolls around, performance reviews are foreshadowing the outcome, rumors of year-to-year lineup changes are swirling, and leaks are outpacing senior management’s efforts to contain them. Team leaders, meanwhile, manage expectations.
Of course, bankers still lobby, scheme and crawl before the work day, dutifully filling out online self-assessments and puffing up their achievements. With large cross-departmental teams handling the work, revenue allocation remains highly subjective, making it easy to claim credit for barely touched work.
But it’s pretty tame stuff. At its height, one senior colleague became notorious for leading a 10-page PowerPoint deck, including a league table of just “his” businesses to show how much worse the bank would have ranked without him. When the story spread, it elicited a mixture of laughter, disbelief and grudging respect for the sheer audacity. I doubt that many people today would have the audacity to pull off such a stunt.
Even the reactions are now refined. Modern bankers know that any overt display – celebration or outrage – can be used as a weapon against them. Get a big bonus? Feign mild disappointment; you don’t want the honchos to reconsider their generosity next year. Freeze? Offer a stoic nod and quietly ask to continue the conversation. Dramatic outbursts from the past are (mostly) relics, obsolete like Gordon Gekko’s Motorola phone cube. When I ran teams, not a single direct report ever raised their voice or gave more than a blink of exasperation, even when their “number” was outnumbered.
Bankers know they are privileged, because they earn far more than 99 percent of the population. But their sense of entitlement isn’t about an absolute number – it’s about comparisons. Nothing hurts more than the feeling that a peer is bringing home more. When comp doesn’t suit them, relative the complaint turns to pent-up bitterness.
Occasionally you hear elsewhere of a banker who loses his temper after getting a “doughnut” (industry slang for zero) or a low bonus. These rare eruptions only highlight how far we have drifted from the old Sturm und Drang.
This transformation reflects broader changes in investment banking, where the colorful culture of previous decades has given way to something far more controlled and conscious of optics and compliance. The annual bonus ritual has become another carefully managed corporate event, whose roughness has been smoothed over by process, the development of office norms and institutional decorum.
So when you get your “number”, don’t slam the door on your way out – it’s against workplace etiquette, and your employer might have reason to return your unowned shares!
