Not a great year for Wall Street bonuses so far
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Bonuses are expected to drop for many on Wall Street this year, but market volatility has created a few winners, per a projection from compensation consulting firm Johnson Associates out Thursday morning.
Why it matters: Finance professionals were excited about the markets in a second Trump term, but so far investors have been on quite the rollercoaster.
- Deal-making has slowed, exits have dropped, and stocks are selling off, per the analysis, which looks at three months of data on firm incentive pools and projects out from the rest of the year.
By the numbers: Year-end bonuses are overall projected to fall by a modest amount of between 5% to 10%.
- For investment bankers who underwrite equities, the drop could be a bit more steep, as high as 20%, given how frozen the market is for IPOs right now.
- But the "downside risk" is higher, the firm notes, for as much as a 25% fall in bonuses, overall, if the U.S. falls into a full-blown trade war.
Yes, but: Thanks to a surge in market volatility and trading activity, folks who work in equity sales, trading and fixed income sales could see a rise in compensation by as much as 25%.
The bottom line: Even if a full trade war and recession are averted, the outlook isn't super rosy. The firm says bonuses would overall stay flat or increase only modestly.
- "Tariffs and geopolitical concerns are biggest wildcard," the firm says.
