Some Wall Street bankers could see their bonuses jump 25%. But there’s one job where payouts will shrink

An industry analysis released this morning by Johnson Associates, Inc., a New York-based compensation consulting firm, projects debt underwriters at investment banks will see their year-end 2024 incentives (cash bonuses and equity awards) increase 15%-25%, compared to 2023. Equity underwriters and fixed income trades could see a 10%-20% bump.

“Most sectors will rebound on higher revenues year over year,” according to Christopher Connors, a principal at Johnson Associates. Following a poor 2022, investment banking revenues are sharply higher in several segments, he said. “Equity markets have boosted AUM [assets under management] and revenues in traditional asset management and long-only hedge funds,” Connors said. 

An increase in bonuses in the range of 5%-10% compared to 2023 is expected for those in wealth management. Incentives are up on higher revenues and increased competition in the talent landscape, Connors said. “There is certainly a desire for wealth managers to retain their client advisors,” he added. 

Wealth management is an area of focus. A recent research report by Allied Market Research finds the market was worth $1.25 trillion in 2020, and projects it to reach $3.43 trillion by 2030. 

Meanwhile, corporate staff incentives (projected 5% to 10%) are trending higher with broader bonus pools, Connor said. Unsurprisingly, those at the very top are also in for a good year. For instance, Coins2Day recently reported that Jamie Dimon, CEO of JPMorgan Chase, the largest bank in the U.S., received his highest annual compensation package to date, a total of $36 million in 2023.

As for traditional asset management professionals, incentives are projected to increase about 5%, while alternative asset professionals are projected to receive a zero to 5% increase.

Johnson Associates’ analysis is based on the firm’s monitoring of the financial services industry, numerous proprietary data points, and public data from eight of the nation’s largest investment and commercial banks, and 10 of the largest asset management firms.

Another finding is despite a weaker fundraising environment, private equity incentives will be moderately higher “partially due to incentive movements in competing talent sectors like investment banking and asset management,” Connors explained. 

One business segment, however, is not expected to be sharing in the bounty—projections show those in commercial and retail banking can expect their bonus to be flat or even drop 5%. “Consumer demand has fallen and net interest income is down,” Connors said. 

Sheryl Estrada
[email protected]

Upcoming event: Coins2Day‘s Future of Finance event in New York City will take place on May 16. It’s going to be a unique opportunity to explore with top players how technology is set to transform finance. You can learn more about it and apply to attend here; email [email protected] with inquiries.

María Soledad Davila Calero curated the Leaderboard and Overheard sections of today’s newsletter.

Leaderboard

Blake McCarthy was appointed CFO at Atlas Energy Solutions (NYSE:AESI), a proppant producer and logistics provider, effective May 13. McCarthy joins the company from NOV, Inc., where he served in various operational and financial roles. Before that, McCarthy was a principal investor with Citadel Global Equities, covering the global oil and gas industry with a specific focus on the oilfield services sector.

Brian Bolster was appointed CFO at NextEra Energy Partners, (NYSE: NEP), a subsidiary of NextEra Energy, a renewable energy company. Bolster is succeeding Kirk Crews, who has been at the company since 2016 and was promoted to the roles of EVP and chief risk officer. Bolster spent 25 years at Goldman Sachs where he was the head of natural resources of the Americas. 

Big Deal

The Job Satisfaction survey released by The Conference Board on Monday is a barometer of satisfaction from the perspective of U.S. Workers. The survey, conducted since 1987, gauges workers’ perceptions of their current role and workplace environment.

A key finding of the report is workers who left their jobs since the pandemic’s onset are much more dissatisfied than those who didn’t. Job switchers’ overall job satisfaction is down 5.6 percentage points—a big decline, according to the report. What's driving the dissatisfaction is leadership quality, communications, interest in the work, coworkers, and job security. 

Another finding is half of those who said they intended to leave their jobs within six months were workers in their jobs for fewer than three years. These workers were largely dissatisfied with bonuses, promotions, training, recognition, and performance reviews.

Meanwhile, flexibility for workers, whether fully remote or hybrid, continues to boost job satisfaction. You can read the complete report here. 

Going deeper

“Warren Buffett predicts ‘higher taxes are likely’ since the national debt won’t pay for itself” is a new Coins2Day report by Christiaan Hetzner. He provides an analysis of Berkshire Hathaway chairman Warren Buffett's outlook. Hetzner writes: “When asked at Saturday’s annual shareholder meeting why he sold 115 million shares of Apple over the past quarter, the Oracle of Omaha predicted companies like his could find themselves handing over more of their earnings to Uncle Sam. And he for one is fine with the idea.”

Overheard

“They don’t want to put themselves in a monopolistic situation. So everybody’s cheering for Boeing to get their act together.”

—Jonathan Berger, managing director at Alton Aviation Consultancy, argues that despite Boeing's ongoing problems, the European aerospace manufacturer Airbus, its competitor in the commercial aircraft sector, is unlikely to try to capitalize and expand its market share.