Wall Street bonuses are back
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After two years of declining year-end bonuses on Wall Street, payouts are set to rise sharply, according to projections released Tuesday morning.
Why it matters: It's been a good year for most of the financial industry, and big bonuses can also mean a big boon for the New York economy.
The big picture: The S&P 500 hit record highs this year.
- The private credit market is booming.
- Even debt issuance was up in 2024 after a slumpy couple of years.
- Corporations issued more than $1.4 trillion in investment-grade U.S. bonds in the first nine months of the year, and are on track for the second-busiest year ever, per a recent Goldman Sachs note.
By the numbers: Year-end bonuses are projected to jump by as much as 35%, according to projections released Tuesday morning from Johnson Associates, a compensation consulting firm.
- Bonuses for investment bankers in debt underwriting are up by as much as 35%.
- Those in equity underwriting could see increases of between 15% and 25%.
Yes, but: There were some outliers. Retail and commercial bankers are expected to receive smaller year-end payments. Loan demand has been weaker — and standards have tightened — in the higher-rate atmosphere for the past couple years.
- Over in commercial real estate, things aren't looking good, as the office sector continues to slump. Bonuses are flat on the year.
What we're watching: Next year the big question mark is how the policy changes from the new administration — tax cuts but also tariff increases and possibly more lax regulation — will change the game.
