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FT editor Roula Khalaf selects her favorite stories in this weekly newsletter.
The writer is former global head of equity capital markets at Bank of America and now managing director of Seda Experts.
on the television show Seinfeldthe Costanza family celebrate a secular end-of-year holiday called Festivus, which features extravagant traditions such as the “Exposition of Grievances” and “Feats of Strength.”
For investment bankers, their equivalent comes 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-1990s, “compensation day” rivaled any holiday in drama and intensity. Doors were slammed, grown men (they were usually men) fought back tears, and impromptu champagne-soaked celebrations spilled into nearby bars. The entire floor creaked with pure excitement.
Today compensation day usually unfolds with all the ceremony of a visit to the local post office. The modern banker is summoned to the boss’s office by an emailed calendar invitation. The manager, armed with a spreadsheet and talking points vetted by HR, delivers the news with the monotony from economics professor Ben Stein in Ferris Bueller’s Day Off.
The script follows a precise formula. First comes the total compensation figure, followed by how it compares on a percentage basis to last year. The manager then 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 stock awards is explained in meticulous detail: which shares will be available and in which years. The manager also announces the base salary for next year.
The meeting concludes with a gentle blessing, ranging from a metaphorical pat on the head about “recognizing your contribution” to a gentle admonishment about “areas of development.”
The domestication of this ceremony can be attributed to several factors, including post-financial crisis regulatory reforms that turned banking booms into slow-drip compensations. Higher base salaries and the introduction of “role-based assignments” in Europe (to move around the EU Bonus Limit) mean that the bonus is often not the decisive moment it used to be. Intense public scrutiny of bank compensation has also forced a kind of procedural sobriety.
Additionally, elements of suspense and surprise have been largely removed. Come January, performance reviews hint at the outcome, rumors circulate about the compensation pool’s year-over-year change, and leaks outpace senior management’s efforts to contain them. Meanwhile, team leaders manage expectations.
Of course, bankers still lobby, plot and humiliate themselves before compensation day, diligently completing online self-assessments and inflating their achievements. With large interdepartmental teams handling deals, revenue attribution remains highly subjective, making it easy to claim credit for work barely done.
But it’s pretty tame. At the height, a senior colleague gained notoriety by presenting leadership with a 10-page PowerPoint presentation, which included a ranking of just “his” deals to show how much worse the bank would have been without him. When the story spread, it provoked a mixture of laughter, disbelief and grudging respect for the sheer chutzpah. I doubt many today would have the nerve to pull a stunt like that.
Even the reactions are now sanitized. Modern bankers know that any open demonstration (joy or fury) can become a weapon against them. Do you get a big bonus? He feigns slight disappointment; You don’t want bosses to reconsider their generosity next year. Be rigid? Nod stoically and quietly request a follow-up conversation. The dramatic outbursts of yesteryear are (mostly) relics, as old-fashioned as Gordon Gekko’s. Motorola telephone block. When I led teams, no direct report raised their voice or betrayed more than a flash of indignation, even when their “number” fell short.
Bankers know they are privileged: they earn much more than 99 percent of the population. But their sense of entitlement is not about absolute numbers, but about comparisons. Nothing hurts more than feeling like a partner is taking more home. When your competition isn’t up to par, the relative grievance turns into muffled bitterness.
From time to time, you hear of a banker elsewhere who loses his temper after receiving a “doughnut” (in industry parlance, zero) or a low bonus. These rare eruptions only serve to underline how far we have come from the old Sturm and Drang.
This transformation reflects broader changes in investment banking, where the cloak-and-dagger culture of previous decades has given way to something much more controlled and more aware 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 close the door on your way out – it’s against the workplace conduct policy, and your employer may have grounds to take back your unvested shares!