by Tatiana Bautzer
NEW YORK (Reuters) – Bonuses paid to employees of companies on Wall Street are expected to increase this year thanks to strong growth in the stock market and the resumption of investment banking activities, according to a study by American firm Johnson Associates.
Investment bankers, who help companies issue debt, are expected to benefit from the biggest bonus increases this year, of 15% to 25%, amid record bond issuance, says Johnson Associates.
With the revival of initial public offerings (IPOs), bonuses for specialists in stock placement are expected to increase by 10% to 20%.
“We’re seeing almost every segment on Wall Street increasing their compensation,” said the New York consulting firm’s founder, Alan Johnson. “The year should be good, even if there are risks linked to the American elections and conflicts in the world, he added.
Despite this expected improvement in bonuses, remuneration in investment banking is still far from the peak reached in 2021. The only segment where remuneration is higher than the 2021 level is that of private equity, but the workforce of these companies are significantly less important than those of banks, notes Alan Johnson.
The increase in trading volumes is expected to lead to an increase in premiums of 10% to 20% for bond traders and 5% to 15% for equity traders.
Executives working in wealth management will likely see their compensation increase by 5% to 10%, while employees in asset management and hedge fund services are expected to receive higher bonuses of 5%.
In asset management, even as clients have shifted away from high-fee products to passive investment products with lower fees, the rise in equities in 2024 has boosted asset volume and profitability of the activity.
(Reporting Tatiana Bautzer; French version Claude Chendjou, editing by Kate Entringer)
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