Closely-watched study projects largest increases for equities sales & trading professionals, investment banking underwriters, and private equity professionals
NEW YORK, Nov. 12, 2018 (GLOBE NEWSWIRE) -- For the second consecutive year, Wall Street professionals can expect to receive moderately larger year-end incentive payments compared to last year, according to a closely-watched analysis released today by Johnson Associates, Inc., a New York-based compensation consulting firm. The annual study reveals payments are expected to increase for most professionals across the industry with equities traders, investment banking underwriters and private equity professionals projected to see the largest increases.
The Johnson Associates third quarter compensation analysis shows overall year-end incentives, which include cash bonuses and equity awards, will be 5 to 10% higher compared to last year. Year-end payments generally increased throughout the industry last year as well.
“Despite a year in which interest rates and stock market volatility increased steadily, Wall Street firms are in a great position to reward their professionals with larger year-end bonuses compared to last year,” said Alan Johnson, managing director of Johnson Associates and one of the nation’s foremost authorities on Wall Street compensation. “The major investment and commercial banking firms continued their strong performance, especially in equities trading and underwriting. Private equity firms also turned in a second straight year of healthy financial results and strong fundraising. The demand for talent throughout the financial services sector was also a contributing factor to projected higher payments at year end.”
The largest increases – 15 to 20% – are projected for equities sales and trading professionals, while private equity professionals, investment banking underwriters and those in staff and management positions will receive bonuses that will average 5 to 10% larger than last year. Investment banking advisors are the only professionals who may see a decline in bonuses (flat to 5%). Payouts for the rest of the industry are expected to increase around 5 % over last year.
| Business Area | Percent Change from 2017 |
| Sales & Trading (Equities) | 15% to 20% |
| Private Equity | 5% to 10% |
| Investment Banking (Underwriting) | 5% to 10% |
| Firm Management/Staff Positions | 5% to 10% |
| Asset Management (Independent and Captive) | 5% |
| Hedge Funds | 5% |
| Commercial/Retail Banking | 0% to 5% |
| Sales & Trading (Fixed Income) | 0% to 5% |
| High Net Worth | 0% to 5% |
| Investment Banking (Advisory) | 0% to Minus 5% |
Johnson Associates regularly monitors compensation trends among a wide range of commercial and investment banks, asset management firms, and other financial services companies. Its quarterly compensation analysis is based on the firm’s ongoing monitoring of the financial services industry, numerous proprietary data points, and public data from seven of the nation’s largest investment and commercial banks and nine of the largest asset management firms.
Outlook for 2019
“As we look toward 2019 however, the picture is less rosy. Ongoing business challenges, including fee compressions, geopolitical influences, and business efficiencies driven by technology, are likely to have an industry-wide, downward impact on compensation and headcount. Beginning now through the first quarter of 2019, we expect to see headcount reductions through both natural attrition and selective terminations. While financial sector businesses are still inherently healthy, the business challenges are expected to catch-up with them,” said Johnson.
ABOUT JOHNSON ASSOCIATES
Johnson Associates is a boutique compensation consulting firm specializing in the design of annual and long-term incentive plans and establishing appropriate market pay levels. The firm is well-known for providing candid advice and for its expertise and in-depth knowledge of the financial services industry, including major investment and commercial banks, asset management firms, hedge funds and other alternative investments, insurance companies, and brokerages. For more information, visit www.jaiconsulting.com
Contact: Ed Emerman
609-275-5162
eemerman@eaglepr.com