Wall Street bonuses are projected to rise across investment and commercial banking based on first-half financial data from 20 asset management firms and 15 major banks. Equity sales and trading bankers are expected to see the largest increases at 20-30% or more, while advisory bankers including M&A dealmakers could see bonuses rise 15-20%. The increases follow a 46% surge in investment banking fees to $12.9 billion in the second quarter compared with the quarter a year ago, according to S&P Global Market Intelligence analysis of five major U.S. banks. Despite the business boom, firms are not increasing hiring at traditional rates, with AI and technology reducing the need for additional staff.
Equity Trading Bonuses Lead with 20-30% Projected Increases
Bankers working in equity sales and trading are projected to see bonuses rise between 20-30% or more, representing the biggest increases in the finance industry according to the projections. Advisory bankers, including M&A dealmakers, are projected to see increases of 15%-20%. Overall bonuses in investment and commercial banking are projected to rise 10-15% or more. The projections are based on first-half financials at 20 traditional asset management firms and 15 major investment and commercial banks, as well as conversations with clients in the industry.
Investment Banking Fees Rose 46% in Second Quarter
Investment banking fees overall rose 46% to $12.9 billion in the second quarter compared with the quarter a year ago, according to analysis of fees at the five big U.S. banks published by S&P Global Market Intelligence. Equity underwriting fees rose 87% from last year at Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup. The roller-coaster of volatility in the market, including the recent rise and fall and rise in chip stocks, is driving more trading activity.
AI Technology Reduces Hiring Despite Business Growth
Firms are not increasing hiring at rates typically seen during business booms due to AI and technology adoption. "Usually people hire when things are really good, and they're not really doing that," Johnson says, noting that AI and technology are a big part of the shift. The technology adoption has not led to layoffs thanks to the surge in business this year, but firms "don't need to hire." Johnson notes that "there hasn't been an event to slow things down" in dealmaking and trading during the first half of the year.
Private Markets Bonuses Projected Flat to Negative
Bonuses are projected to be flat for those working in real estate and at small private equity firms and venture capital outlets. At private credit companies, which are having a notoriously rough year, bonus growth is projected to be flat to negative 10%. Private markets have led the pack for more than a decade, making this year's reversal a "seismic change," Johnson says.
FAQ
Which Wall Street sector will see the highest bonus increases?
Equity sales and trading bankers are projected to see bonuses rise between 20-30% or more, representing the biggest increases in the finance industry according to projections based on first-half data from 20 asset management firms and 15 major banks.
How much did investment banking fees increase in the second quarter?
Investment banking fees overall rose 46% to $12.9 billion in the second quarter compared with the quarter a year ago, with equity underwriting fees rising 87% at Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup according to S&P Global Market Intelligence.
Why are Wall Street firms not hiring despite rising bonuses?
AI and technology are reducing the need for additional staff despite the business boom, with firms choosing not to hire at traditional rates even as bonuses increase 10-30% across different sectors.
