Wall Street bonuses are expected to rise for the first time since 2021: report
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Wall Street companies are expected to pay higher bonuses this year, the first increase since 2021, according to a report by compensation firm Johnson Associates.
Bonuses are expected to rise after recent months have seen increases in bond prices, the Federal Reserve cut interest rates and rising stock markets record highs.
“This year has been surprisingly good, and the industry is very optimistic about 2025, especially with the opportunities to announce M&A deals,” the company’s founder, Alan Johnson, told Reuters.
Although bonuses are rising for the first time in three years, they will remain below the record levels reached in 2021, when, Johnson notes, there is “unusually good” income and compensation.
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An analysis by Johnson Associates found that Wall Street firms are expected to increase bonuses to record levels starting in 2021. (Michael M. Santiago/Getty Images/Getty Images)
Investment banks operate in underwriting of debts the sector will see a significant increase in bonuses compared to their peers in other sectors, increasing by 25% to 35% as a result of which Johnson Associates noted that the income is increasing due to the growth of loan issuance.
Equity underwriters are expected to see bonuses increase by 15% to 25% compared to last year, and incomes are expected to increase significantly from 2023 though little IPO marketnoted the company.
Traders are likely to see bonuses increase by 15% to 20% amid increased activity in the stock market and higher levels of volatility.
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Federal Reserve rate cuts helped spur more activity in the market. (Michael Nagle/Bloomberg via Getty Images/Getty Images)
Bonuses for corporate executives are expected to increase by 10% to 15% amid increases in all business segments and reductions in loan loss provisions.
Asset management and wealth management professionals are expected to see bonuses increase by 7% to 12% from last year due to market penetration and appreciation.
Bankers advise mergers and acquisitions bonuses are expected to increase by 5% to 10%, the same for fixed income salespeople, corporate and insurance workers.
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Wall Street bankers who underwrite debt are expected to get a big increase in bonuses. (Yuki Iwamura/Bloomberg via Getty Images/Getty Images)
Other places in banking sector are expected to see flat or declining bonuses due to sluggish activity in those market segments, the report found.
Real estate Bankers’ bonuses are expected to remain flat after a multi-year slump that has seen the market bearish, writes Johnson Associates.
Bonuses for bankers and traders are likely to fall by 5% or remain low due to reduced lending provisions and loan losses.
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Reuters contributed to this report.
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