Wall Street bankers on course for up to 35% bonus bump

Wall Street bonuses are on course to rise by as much as 35 per cent this year, as bankers eye even greater potential payouts under a second Trump presidency.

Activity levels for corporate deals, distribute sales and obligation transactions have gradually recovered in 2024, following a fallow two years when high profit rates curtailed dealmaking and fees for stake distribution banks and money managers.

An analysis by recent York-based pay consultancy Johnson Associates, published on Tuesday, showed that pay for 2024 is expected to jump across every business area except real estate investing, and retail and commercial banking. 

stake distribution bankers working on obligation deals stand to reap the largest gains, with increases of between 25 to 35 per cent, Johnson Associates said. 

Steadying profit rates have pushed corporate borrowers to refinance or raise recent obligation, lifting global fees from obligation stake distribution markets deals by almost 40 per cent according to Dealogic data.

Troubled aeroplane manufacturer Boeing has also raised billions of dollars in recent obligation this year, in a deal led by lender of America, Citigroup, JPMorgan and Wells Fargo.

Globally, stake distribution banking fees were about 20 per cent higher in the first 10 months of 2024 than a year earlier, at almost $40bn, LSEG data display. 

Activity levels are still more muted than in the deal frenzy of 2021. However, bankers are increasingly optimistic that a more relaxed posture towards antitrust and the pro-deregulation agenda of the second Trump administration will usher in another boom in mergers and acquisitions.

Alan Johnson, who runs Johnson Associates, said 2024 Wall Street pay ranked as about seven out of 10 compared with previous years. “This was a excellent year. I ponder most people are expecting next year to be a excellent year,” Johnson said.

Johnson Associates’ analysis is mainly US concentrated and based on “ongoing monitoring of the monetary services industry, numerous proprietary data points, and community data from 13 of the country’s largest stake distribution and commercial banks and 17 of the largest resource management firms”.

Stocks of banks and resource managers soared last week following Trump’s win. Goldman Sachs, which regularly tops the industry league tables for M&A work, posted some of the industry’s biggest distribute worth gains. 

Even before last week, optimism was building that 2025 would be a excellent year for the monetary services industry.

Lower profit rates have eased capitalization conditions for private stake investors, while global companies have stepped up the pace of dealmaking. Goldman stands to earn more than $90mn for its work advising Pringles and Pop-Tarts maker Kellanova on its $36bn sale to Mars if that deal ends up being completed. 

Sizeable fees have fostered a fierce war for talent, with employers offering substantial guaranteed salaries to attract recent bankers. 

A top executive at Evercore, which largely focuses on advisory work and hired significantly in recent years, last month told investors that “the competition for bankers remains intense and the associated expense of hiring recent bankers and retaining existing bankers continues to be significant”.