Wall Street bonuses set to surge amid revival in deals: Report

Wall Street bonuses: Financial services compensation firm Johnson Associates forecasts a rebound in bonuses on Wall Street this year, buoyed by robust gains in the equity markets and a resurgence in investment banking activity.

According to the firm's founder Alan Johnson, investment bankers assisting companies with debt issuances are likely to see the bonus increases, ranging from 15 per cent to 25 per cent, as companies embark on record debt-selling sprees.

The revival of initial public offerings (IPOs) is expected to drive up bonuses for equity underwriters by 10 per cent to 20 per cent in the current year, signalling a positive trend in deal-making activities.

Johnson noted that virtually all sectors of Wall Street are witnessing upward revisions in compensation, marking a promising year ahead, despite potential risks stemming from US elections and global conflicts.

While compensation levels in investment banking are on the mend, they still lag behind the peak levels observed in 2021. Private equity stands out as the only segment where pay surpasses 2021 levels, albeit the workforce in these firms is notably smaller compared to banks.

Bond traders are anticipated to receive bonuses elevated by 10 per cent to 20 per cent, fuelled by higher trading volumes, while equity traders may see their bonuses climb by 5 per cent to 15 per cent. Professionals in wealth management can expect a 5 per cent to 10 per cent uptick in compensation, whereas those in asset management and hedge funds are forecasted to receive bonuses 5 per cent higher than the previous year.

Despite the trend of clients shifting towards lower fee products in asset management, the surge in stock prices in 2024 has bolstered asset volumes and profitability in the industry, contributing to the overall optimistic outlook for bonuses across various sectors.

(With Reuters inputs)