Morning Coffee: $1m+ bankers discover harsh reality of life outside the “sweet spot”. The most indirectly lucrative expenses claim ever
If you’re a partner at Perella Weinberg, you might reasonably believe that you’ve won the game of investment banking. It’s one of the best names in the boutique world, and not only does it pay pretty well across the board, it pays its partners significantly better than the ordinary ranks. The London-based entity seems to have been a particular gold mine; it paid out just under £95m in staff costs in 2024 (the most recent year for which accounts are available), equivalent to an average of $900k per front office employee. And the highest paid director in that year got £24.9m ($33.5m) in total compensation (including long term incentive payments).
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But the last twelve months have been a lesson in how fortunes can change. In 2025, Perella’s revenues dropped by 14%, during a period when it hired twelve new partners and 11 Managing Directors. The lucrative London office has also acquired Gleacher Shacklock, adding a few more hungry mouths in 2026, as revenues have continued to fall. Pay per head seems to have dropped across the bank, but something was bound to give.
And now something has given. Perella Weinberg will be cutting 10% of its global staff (about seventy heads), including some partners. The cuts are apparently “concentrated in industry sub-sectors that have lagged behind the broader market”, but that could mean anything, as so far this year, more or less everything except mega-cap tech has been below average.
In particular, however, the energy sector has been unusually hard-hit by geopolitical uncertainty, and within that sector, there have been only three deals valued at above $1bn. This is usually regarded as the “sweet spot” for boutique banks like Perella Weinberg, as it’s a size of deal which isn’t so huge as to require the involvement of a bulge bracket player, but still generates extremely good fees.
According to “a person familiar with the matter”, this doesn’t exactly mean that Perella is on the back foot; it is still investing in its focused growth bets, like Gleacher Shacklock or Devon Park Advisors (the secondary market private equity specialist). But it seems that the pain has got a little bit too much to bear as the company waits to see, “what happens when the fog of war lifts”, in the words of CEO Andrew Bednar.
Using layoffs to manage the business cycle is a controversial strategy in investment banking. There’s a sense in which it’s breaking the unwritten rules of the game, under which people commit themselves fully to the job, often at considerable cost to their private life. And out-of-favour sectors have a habit of suddenly turning around, making highly desirable stars out of yesterday’s Cinderellas. The bankers who are about to receive extremely unwelcome news may be expecting it; everyone knows what happens to a rainmaker who can’t make the rain. But they may still reasonably think that there was scope to cut costs by reducing pay across the board rather than drastic headcount reductions.
Elsewhere, spending $642.50 on a “deli platter” somehow feels like the kind of amount that’s either too much or too little – it’s an absurd amount to spend on a normal order of sandwiches and cold cuts, but if you’re entertaining wealth management clients it seems almost dangerously frugal.
This might have been some part of the reason for the disagreement between wirehouse broker Brent Ryan Bodner and his employers at JP Morgan Chase. JPM saw the expenses claim come through, formed the opinion that Bodner was trying to pay for a “Super Bowl party” on the company dime, and fired him. Bodner, on the other hand, said that the platter was delivered to his own house, where he was entertaining a client, and that what ensued was all a pretext to steal his clients.
The FINRA arbitration panel did not go into any particular detail about who (or who’s assistant) got things wrong or how. But we can guess who they broadly sided with, from the fact that they awarded Bodner $4.25m in damages and changed his BrokerCheck file to remove dismissal.
It should be noted that they didn’t award the $15m of punitive damages that Bodner had asked for (or the full amount of his claim for compensation), and that JP Morgan Wealth Management says that they “vehemently disagree with FINRA’s decision and are disappointed by this outcome”. As well they might - $642.50 is pricey for a deli plate, but $4m is downright extravagant.
Meanwhile …
Underlining exactly how well paid boutique investment bankers are, SocGen’s Slawomir Krupa just won a shareholder vote on a pay package with a basic salary of €2.4m and upside to €7.2m, for being the CEO of one of Europe’s largest banking groups. (Bloomberg)
A trade association believes that as a result of Brexit, as many as 15,000 financial sector jobs have been created … in Frankfurt. (Les Echos)
Doing the due diligence on M&A deals is usually a bit of a hard task, but hopefully some junior banker will be able to enjoy carrying out channel checks on the acquisition of the extremely luxurious Park Hyatt Beaver Creek Resort and Spa in Colorado by Sixth Street Partners. (Bloomberg)
Napoleon apocryphally said that if you want to know someone’s world view, ask yourself what was happening when they were twenty years old. There appears to be empirical evidence that this is true of central bankers and their attitude to inflation; it’s probably true of other kinds of bankers too. (FT)
Travelling nurses can earn banker-type salaries, get considerable tax benefits, and, unlike junior bankers, nobody seems to mind about your side hustle as a social media influencer. (WSJ)
Having left ExodusPoint after getting a reported $50m pay offer, and left Millennium after having his capital allocation cut, macro trader John Curtice has now left Brevan Howard, slightly more than a year after joining. (Bloomberg)
If your MD seems unbearably uptight, maybe you should club together and buy them a jaw massage (Vox)
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