According to estimates by HR and salary consultancy firm Johnson Associates, bonuses on Wall Street are likely to rise again for the first time since 2021. Variable remuneration is expected to be higher in almost all sectors of the industry.

Investment bankers, traders and asset management experts can expect double-digit increases in their remuneration at the end of the year, according to the study. The growth is expected to be particularly pronounced in the corporate credit sector with payouts projected to rise by up to 35 percent. Accordung to the report, activity in this area has increased significantly, and the capital markets have shown signs of recovery.

Up to 20 Percent More is Possible

Companies had slowed their share and bond sales following the Federal Reserve's interest rate hike. However, in recent months, they have returned to the market. This renewed acrivity has also boosted bonuses, with those in the share issuance segment nearing the levels of bond issuers, where forecast distributions are expected to rise by up to 25 percent.

Bonuses for equity traders could rise by around 20 percent, while their colleagues in the bond sector are likely to see a more modest increase of 5 to 10 percent.

Bonuses in the advisory sector will therefore rise by up to 10 percent as the M&A order book gains momentum.

Bank employees in the private and corporate client business, on the other hand, can expect their remuneration to stagnate or fall by 5 percent. The reasons cited here are the decline in lending and higher provisions.

Not Euphoric, But Satisfied

«This year has been unusual in that almost all financial sectors have increased significantly,» Alan Johnson, Managing Director of the consultancy specializing in remuneration models, is quoted as saying by the news agency «Bloomberg». «Most employees will not be euphoric, but moderately satisfied and companies are optimistic for the year 2025.»

The trend suggests that US banks will post their biggest profits since 2021. Although there are still uncertainties with regard to the fourth quarter, the outlook for bonuses is positive.

2023 Still with a Decline

In the past two years, variable remuneration at Wall Street banks has declined. According to figures published by the New York State Comptroller at the beginning of October, the average salary in the local financial sector in 2023, including bonuses, was $471,370, a decrease of 5.2 percent compared to the previous year.