Wall Street bonus turnaround to spare retail, commercial banking
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The news: Wall Street bonuses are set to rise for the first time since 2021, except for retail and commercial banking, according to Johnson Associates.
The numbers: Investment bankers focusing on debt underwriting could see the largest bonus gains, with projections of 25%–35%, while equity underwriters may receive increases of 15%–25%.
Equity sales and trading bonuses could rise by up to 20%, while fixed-income trading payouts might see a 5%–10% boost.
Asset and wealth management professionals could also see bonuses increase by up to 12%, driven by market gains and fund inflows.
Retail and commercial banking, however, faces flat or declining bonuses, potentially down 5%.
Private credit, the most sought-after sector for talent, is poised for a minimum bonus increase of 10%.
The context: The upturn follows two years of declines after 2021’s record payouts on the back of record corporate deals in the wake of the pandemic. Regulatory changes under President-elect Trump may also support M&A growth.
Retail and commercial bankers face flat or declining incentives amid slow lending and higher credit loss provisions.
Despite the broad optimism, economic uncertainty and potential interest rate changes could impact payouts.
What they said: "This year has been surprisingly good, and the industry is quite optimistic about 2025, especially with the potential of announcing more M&A deals," the consultancy's founder, Alan Johnson, told Reuters.
“We have climbed part of the hill in 2024, and people will be rewarded for that. And next year we will go further up that hill,” he told Bloomberg.
“Most people will not be euphoric but moderately happy.”
The sources: Johnson Associates , Bloomberg , Reuters
