JPMorgan Will Fire Junior Bankers Over a Common Practice That CEO Jamie Dimon Calls 'Unethical' According to a leaked memo, JPMorgan is telling junior analysts that they will be fired if they accept another job in advance.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- JPMorgan Chase has a new policy on job hopping.
- In a leaked email, JPMorgan executives warn junior analysts that they will be fired if they accept another job offer within 18 months of joining the company.
- This means that junior bankers at JPMorgan can no longer accept private equity job offers years in advance.
JPMorgan Chase, the largest bank in the U.S. with $3.9 trillion in assets, is cracking down on junior employees accepting other positions while working at the firm, according to a leaked email.
Private equity firms offer candidates jobs up to two years in advance of a start date. This extended timeline means that recent graduates often seek out high-paying private equity jobs before (or while) working as investment banking analysts at companies like JPMorgan.
Now, JPMorgan is warning incoming U.S. analysts that they will be fired if they accept a future-dated job offer within 18 months of joining the firm.
The leaked email, sent by JPMorgan's co-heads of global banking, Filippo Gori and John Simmons, to newly recruited analysts last week, reads: "If you accept a position with another company before joining us or within your first 18 months, you will be provided notice and your employment with the firm will end."
The new policy is intended to remove any "potential conflicts of interest" and maintain the trust of the bank's clients, the email explains. The memo also states that analysts can be fired for missing onboarding sessions and summer training.
The email added that, in return, JPMorgan would reduce the time it takes to get to the associate level, from three years to two and a half years, to promote promising talent more quickly.
JPMorgan CEO Jamie Dimon, 69, addressed the problem of losing talent to private equity late last year, calling the practice "unethical."
"I know a lot of you work at JPMorgan, you take a job at a private equity shop before you even start with us," Dimon said at a talk at Georgetown University in September. "I think that's unethical. I don't like it."
Dimon said that the practice of job hopping to private equity puts JPMorgan "in a conflicted position" because junior analysts are already promised to another firm while dealing with confidential information at JPMorgan.
JPMorgan CEO Jamie Dimon. Photographer: Qilai Shen/Bloomberg via Getty Images
Private equity typically pays more compared to investment banking. Associates at private equity firms make a median of $236,000 per year, including base pay and bonuses, according to Glassdoor data. In comparison, first-year analysts at JPMorgan make $100,000 per year in base salary, with pay rising to $105,000 for second-year analysts and $110,000 for third-year staff.
Investment banking hours are also longer than private equity hours, though JPMorgan began restricting junior investment bankers' working hours to 80 hours a week in September. Private equity firms still require less office time, an average of 60 to 70 hours per week. The average U.S. workweek was 34.3 hours in May.
