Wall Street bonuses are expected to rise for the second year for traders and investment bankers on surging deal volume and market volatility, according to financial compensation consultancy Johnson Associates.
The bonus pool is expected to be the highest since 2021, when deals and profits surged to a record. Equity sales and trading professionals are expected to get the biggest bonus bumps of 15% to 25%, while investment bankers in M&A advisory and equity underwriting will likely get increases of 10% to 15%.
The Reuters Daily Briefing newsletter provides all the news you need to start your day.
“Markets are at record valuations and there is a large pipeline of deals that were paralyzed and now are getting released,” said Alan Johnson, managing director of Johnson Associates.
Tariffs introduced by U.S. President Donald Trump this year fueled market volatility, buoying trading desks. As the deal environment improved in the second and third quarters, banks ramped up hiring of senior investment bankers.
Incentives for financial professionals in hedge funds, private credit, insurance, retail and commercial banking are projected to rise by as much as 5% to 10%.
The boom times may fade next year if the economy slows and credit and investment deteriorate, Johnson predicted.
Financial firms are expected to reduce up to 20% of their workforce over the next five years, largely because of artificial intelligence. The headcount reductions will initially reduce the number of entry-level employees, but eventually affect mid-level operational roles.
“Everyone is now trying to understand how this dynamic will affect financial careers,” Johnson said. With a smaller group of junior employees, the pool for promotions will be smaller.
Salary increases are expected to significantly slow this year to an average between 3% and 3.5%, Johnson said.
“Companies are focused on keeping costs down, have slowed hiring and will start cutting headcount due to AI,” posing challenges for employees trying to secure larger pay increases, he said.
EXPECTED CHANGES IN 2025 BONUSES
| Business Area | Percent Change from 2024 |
| Equity Sales & Trading | Up 15% to 25% |
| Firm Management (Equity Underwriting) | Up 10% to 15% |
| Advisory | Up 10% to 15% |
| Wealth Management | Up 8% to 10% |
| Asset Management | Up 7% to 12% |
| Fixed Income Sales & Trading | Up 5% to 15% |
| Investment Banking (Debt Underwriting) | Up 5% to 15% |
| Investment Banking (Equity Underwriting) | Up 5% to 8% |
| Private Credit | Up 5% to 10% |
| Corporate Staff | Up 5% to 8% |
| Hedge Funds | Up 2.5% to 10% |
| Insurance | Up 2.5% to 5% |
| Retail & Commercial Banking | Flat to Up 5% |
| Private Equity | Flat to Up 5% |
| Real Estate | Flat |
Source : Reuters
A growing body of evidence shows that rising inflows of immigrants and refugees can trigger…
Standard Chartered says country to benefit from shifts in global supply chains, strong non-oil sector.…
In October, the company listed a $130 million sukuk on the Muscat Stock Exchange. Oil…
Two GCC markets account for 91% of total funding deployed across MENA. Startups in Saudi…
From urbanization to agriculture, land systems touch nearly every aspect of development. That’s why the…
US objections have not killed off the 15 percent global minimum tax, but they have…