While the coronavirus pandemic certainly caused some mayhem in the markets and hurt plenty of companies’ balance sheets this year, those working on Wall Street are still likely to see bonuses in 2020.
But the payouts for many financial services industry workers are likely to be smaller than in 2019, according to a new analysis from Wall Street compensation consulting firm Johnson Associates.
“The pandemic is wreaking havoc on many parts of the U.S. economy this year, and the financial services industry is no exception,” said Alan Johnson, managing director of Johnson Associates. “While many industry segments have bounced back, the majority of professionals at traditional and alternative asset firms as well as retail and commercial bankers will see smaller bonuses.”
As a jumping off point for comparison, the average bonus paid to those in the securities industry topped $164,000 last year, according to the New York City Comptroller’s Office.
How Wall Street pros’ bonus checks will compare year-over-year depends on what services they provide.
Johnson Associates noted that major investment and commercial banks saw “strong investment banking performance,” but their commercial and retail banking businesses were weaker, which will push bonuses lower. And though there was a “dramatic recovery” in asset management, hedge funds, and private equity, incentives are still expected to decline moderately.
Johnson Associates estimates those in retail and commercial banking will see the steepest declines. Their payouts are likely to be 25% to 30% less.
Investment bankers could see drops of 15% to 20%, while financial services management and staff could see declines of 10% to 15%.
Bonuses for those working in private equity and hedge funds are expected to be down between 5% and 10%.
But there are a few groups that will buck the downward trend, thanks largely to the constant uncertainty of 2020 and often high volatility that led to record trading this year.
Professionals in fixed income sales and trading could see a jump of 40% to 45% in their bonuses, while those in equities sales and trading may get a bump of 20% to 25%.
Investment banking underwriters, meanwhile, are in line for a 35% to 40% increase, Johnson Associates reported.
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