Chris Connors, managing director at Johnson Associates, says Wall Street bankers could be having one of their best years ever. He says bonuses could rise by 10% to 15% or more for investment and commercial bankers. But he says some sectors are being left behind. He speaks on “Bloomberg Open Interest.”
Wall Street is reveling in a year of mega deals, a surging stock market, and a continuing AI frenzy. The latest signal is a 2026 bonus boom expected to spill across most corners of finance, according to Johnson Associates. The compensation consulting firm has hiked bonus projections by an average of 3 percentage points from its already bullish first quarter forcast. The firm tracks across 21 Wall Street job categories.
Bank executives’ compensation will rise the most among all financial sectors on Wall Street, as record revenues on trading and deals boost bonuses, according to Johnson Associates, a financial compensation consultancy.
In a report published on Wednesday, the consultancy projects bonuses for equity traders and equity capital markets bankers rise 20% to 30% this year. Investment bankers working on M&A transactions are expected to have bonuses 15% to 20% higher this year.
“Most of the excitement is coming from the equity side, with stock markets at record highs and volatility increasing trading volume“, said Alan Johnson, the consultancy’s founder.
This year will be very good for Wall Street compensation, a ‘pleasant surprise’, according to Johnson, despite the U.S.-Israeli war on Iran, inflationary pressure and interest rate volatility.
Executives trading fixed income instruments could have bonuses 7.5% to 12.5% higher, and investment bankers underwriting bonds and loans may increase their compensation by 5% to 10%. Margins on fixed income are lower and compensation had risen in previous years, Johnson added.
Executives in private credit will probably receive bonuses flat to 10% smaller, according to the consultancy projections, after some fraud cases led to large redemption requests from retail clients.
Large private equity portfolios are expected to slightly raise bonuses, between 2.5% to 7.5% this year. Executives working at medium private equity portfolios or real estate will see flat incentives.
“Private equity is treading water, trying to make profitable exits from companies that were acquired at high prices“, Johnson added.
The rise of Wall Street banks comes after they posted record first-half earnings. The giants took advantage of unusually active markets while US customers continued to spend and borrow. Pay for stock traders and IPO bankers is estimated to jump as much as 30% over last year, followed by M&A bankers and senior bank executives, who are projected to see a bonus increase of 17.5%.
Broader corporate staff, including those working in operations, IT, finance, and human resources, are also expected to see a double-digit increase. Bond underwriters and fixed-income traders are on track for 7.5% bonus growth, while commercial and retail bankers are expected to get a 5% bump. It will also be a good year for most asset and wealth managers, with the exception of pros working in private markets, where compensation is expected to vary drastically.The pay dynamic signals a sharp unwinding of the past decade’s trend, where private equity, credit, hedge funds, and other alternative businesses were the hottest places to be on Wall Street.
“The advantage that alternative asset management firms have had, at least for the time being, has fully gone away,” Johnson said.
Excluding carried interest payments, bonuses in infrastructure investing and large private equity firms are trending up 7.5% and 5%, respectively.
Pros in real estate asset management, venture capital, and smaller PE shops are not projected to receive any pay increase in aggregate. Furthermore, the once-high-flying private credit industry is expected to see bonuses drop as much as 10%, according to Johnson Associates.
About the Author
Becky Anthony is a tech writer and researcher at techregard. Based in Nigeria, she has a background in English from Bayero University and a strong interest in how technology drives growth and access. She enjoys telling stories about technology, startups and innovation in ways that are clear, human and useful for readers across Africa and globally.
