Wall Street Investment Banking Bonuses Could Increase by Up to 35%, According to Compensation Specialist

NEW YORK (Reuters) – Investment bankers involved in debt underwriting are projected to see bonuses increase by 25% to 35% this year, while those managing initial public offerings could experience a 20% to 30% rise in bonuses in 2024, according to a report from Johnson Associates, a firm specializing in Wall Street compensation analysis.

The primary drivers for the expected increase in compensation are robust growth in debt issuance and a surge in IPO activity, which has already outperformed the total raised throughout all of 2023.

Despite investment-banking revenues remaining below historical highs, the report highlights a significant uptick in market activities.

Additionally, bonuses in equity and fixed income sales and trading are also projected to rise. Equity traders might see a 10% to 15% increase in their bonuses, while fixed-income traders could receive 5% to 10% more.

The report indicates that clients are starting to take on more risk in equities, coinciding with market expectations for potential rate cuts in the future.

Despite strong growth in recent years, alternative investment firms are expected to offer bonuses that are flat or increase by up to 10% this year; these firms have significant amounts of uninvested capital.

Wealth management and asset management executives are anticipated to see their incentives rise by 5% to 10% in the upcoming year, according to the consultancy’s predictions.