Deluged by client orders and often working from home, Goldman Sachs Group Inc.’s workforce generated 15% more revenue per employee during the tumult of 2020. But as the year wound down, the firm had spent an average of just 2% more on each person.

Inside JPMorgan Chase & Co.’s investment bank, revenue per employee surged 22%. The figure for pay: up 1%.

For months, the question has hung over the industry: How would investment banks reward workers hauling in a windfall during a pandemic spreading pain and economic disparity? The answer — at least broadly — is not so lavishly. While few big U.S. banks disclose figures revealing how they compensated Wall Street-oriented workforces, the few that do offered striking snapshots of restraint. Even companywide figures at major banks hint at similar trends.

And no wonder: Earnings reports in recent days underscored anew how hard 2020’s tumult battered other business lines such as lending, where banks stockpiled tens of billions to cover bad loans. Despite the flurry of activity on Wall Street, total revenue at the nation’s six banking giants was little changed last year. The group boosted average pay per employee by a mere $271.

Now those same firms are bracing for tougher times in Washington, where Democrats skeptical of large financial-industry paychecks are ascendant.

From President Joe Biden’s recent picks of veteran watchdogs — such as Gary Gensler for the Securities and Exchange Commission and Rohit Chopra for the Consumer Financial Protection Bureau — to his focus on inequality, there are signs the industry faces both tougher scrutiny and regulation.

The changing of the guard may further embolden lawmakers and other critics who want to publish more data on industry wages, curb pay for chief executive officers and restrict bonuses that could encourage risk-taking.

“The optics aren’t good” right now for large payouts, said Mayra Rodriguez Valladares, a former analyst at the Federal Reserve Bank of New York who now trains bankers and regulators through her consulting firm, MRV Associates Inc. “The more you reward the big lenders, the big traders, they take on more risk,” which would attract criticism, she said.

Citi’s Pay Cuts
Indeed, Citigroup Inc. decided to cut bonuses for dozens of its top executives after the bank was reprimanded by regulators last year, a person with knowledge of the matter said this week.

Pay per employee offers a look at compensation trends that adjusts for changes in the size of a workforce. Calculations for this story are based on year-end headcount figures.

To be sure, figures are averages that don’t reflect what banks award particular rainmakers, who can still score multimillion-dollar bonuses. And it’s not unusual for senior executives to deprive some people of raises to fund more-generous bonuses for those that outperform or are vulnerable to poaching.

Hints have been emerging for weeks that some banks would opt to keep a lid on compensation for Wall Street operations pulling in loads of cash, ending a years-long period in which revenue and compensation have generally moved by similar degrees.

By late November, Bank of America Corp. executives were discussing proposals to keep its bonus pool for sales and trading at the prior year’s level. By December, Citigroup aimed to leave its overall pot unchanged for equities, while boosting it for bond traders by at least 10%. More-generous increases approaching 20% were under discussion in Goldman Sachs and JPMorgan, but even there, the thinking was that moves would vary widely.

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