Wall Street pay set to climb as volatility and M&A surge

Wall Street bonuses are projected to jump for the second year in a row as market volatility fuels trading demand and dealmaking makes its long-awaited comeback.

- KATHERINE DOHERTY

Investment bankers, traders and wealth-management professionals are all poised to see increases in their year-end incentive pay, according to a report Wednesday from compensation consultant Johnson Associates Inc. Equity traders who help investors position their stock bets may see the biggest gains, with payouts set to rise as much as 25%, fuelled by market swings.

"This is an unusually positive year across all sectors," Alan Johnson, managing director of Johnson Associates, said. "The economy and financial markets have held up, and the banks have benefited from continued volatility."

The trends point to yet another banner year for incentive pay following 2024’s revenue rebound on Wall Street. Last year ended with strong payouts after years of restraint, as profits soared across the financial industry. Even amid lingering geopolitical uncertainties, an upturn in business should lead to a second year of bigger pay packages, Johnson Associates said.

The forecast follows strong third-quarter performances from US banks during another volatile period since President Donald Trump started his global trade war, fuelling demand on trading desks. For equity traders, bonuses may be up 15% to 25%, while their fixed-income counterparts could see a more modest increase of 5% to 15%, according to the report.