Wall Street Bonuses Set to Increase in 2024

By Tatiana Bautzer

NEW YORK (Reuters) – Wall Street firms are expected to pay heftier bonuses for this year, marking the first increase since a bumper year in 2021, according to a report by compensation consultancy Johnson Associates.

Payouts are likely to rise following several positive trends in recent months: a recovery in dealmaking, the Federal Reserve cutting interest rates, and equity markets surging to record highs. Alan Johnson, the consultancy's founder, noted, "This year has been surprisingly good, and the industry is quite optimistic about 2025, especially with the potential of announcing more M&A deals."

Although bonuses will be more generous, they will still remain below the record levels of 2021, which saw "abnormally good" revenue and compensation.

Expected Bonus Increases by Sector
– Investment Bankers in Debt Underwriting: Projected surge of 25% to 35% for 2024 due to a resurgence in activity.
– Equity Capital Markets: Expected boosts of 15% to 25%.
– M&A Advisers: Modest increases of 5% to 10%.
– Traders: Windfalls from increased volatility, with equity sales and trading professionals expecting bonuses to climb about 15% to 20%, while fixed income is projected to rise by 5% to 10%.

However, not all bankers will benefit from this recovery. Bonuses for retail and commercial bankers are expected to decline or remain flat for the year.