Goldman Sachs and JPMorgan Chase , Wall Street's premier investment banks, this week informed staff of bumper bonuses for 2021, following a record-breaking year for Wall Street dealmaking.

Bonuses Upped as Much as 50%

Goldman Sachs increased its annual bonus pool for top-performing investment bankers by 40% to 50%, people with direct knowledge of the matter said.

JPMorgan Chase, the largest U.S. bank, increased its annual bonus pool for top-performing investment bankers by 30% to 40%, sources with direct knowledge of the matter said.

Top performers in M&A advisory and equity capital markets enjoyed some of the biggest bonuses at both banks, the people said.

Wall Street's biggest banks are facing cutthroat competition to hire and are paying more to recruit and retain top talent. But that comes at a price.

In the latest quarter, non-interest expenses at the nation's biggest banks ballooned by tens of billions of dollars, hurting profit growth, earnings disclosures showed.

JPMorgan Chase reported last week that its non-interest expenses jumped 11% in the fourth quarter last year, largely due to higher staff compensation.

We Will Pay What It Takes: Jamie Dimon

JPMorgan boss Jamie Dimon said the bank would pay what it takes to retain the bank's top talent.

"We will be competitive and pay and if that squeezes margin a little bit for shareholders, so be it," he told analysts.

Top executives at Goldman Sachs echoed those statements on Tuesday.