Wall street to see biggest bonus increases since pandemic

Executives at large financial banks on Wall Street are reportedly finalising plans to give traders and dealmakers the biggest bonus increases since the pandemic, with several desks set to receive 10 per cent or more. This is according to a Bloomberg report quoting sources. 

Bloomberg sources said 10 per cent is the typical raise in store for investment bankers and traders who deal with equities and fixed-income products. Traders' incentives will increase by over 10 per cent at Morgan Stanley and its bigger competitor, JPMorgan Chase. 

Bonuses for investment bankers at JPMorgan will also increase by about 15 per cent. The consensus among c-suite executives is that Goldman Sachs group will pay a lot more than those figures. These increases come after two years of industry-wide constraint caused by the pandemic. 

Bonus turnaround

During the last two years, investment banks battled to keep up with the bustle of trading and dealmaking. Mild raises weren't enough to cover inflation on most desks a year ago. 

There has been a turnaround, and managers are optimistic about the coming year. As a result, they are preparing increases in bonuses to reflect that sentiment. Wall street's year-end rewards are notoriously volatile as the industry cycles through booms and busts. 

When times are good, individual windfalls can stretch into millions of dollars — multiples of what bankers and traders might reap from salaries. Compensation experts have been predicting for months that investment bankers, traders, and asset and wealth managers will receive rises in the double digits this round. 

Some lines of business within larger divisions potentially predict increases reaching 20 per cent. A November report by Johnson associates forecasts that equity underwriters may get as much as 25 per cent more, with debt underwriters reaching as much as 35 per cent.