Wall Street bonuses to increase for first time in three years

Bankers will receive their bonus checks at the end of this year with a substantial increase, according to Johnson Associates, implying that the sector has a positive outlook for the future.

The financial industry has had a strong year—the S&P 500 hit record highs in 2024. Debt issuance increased, with corporations issuing over $1.4 trillion in US bonds, making it one of the busiest years.

The past two years saw declining year-end bonuses. On average, bankers received $176,500 as a bonus last year, according to figures released by State Comptroller Thomas DiNapoli’s office.

Investment bankers in debt underwriting would see the biggest increase; their bonuses are set to rise by 35%. Equity underwriters could get 15% to 25% higher bonuses.

Who misses out
Retail and commercial bankers may see smaller bonuses due to weak loan demand and stricter lending rules. The commercial real estate sector, especially offices, is struggling, keeping bonuses flat.

The uptick follows a rough period in 2022 and 2023 when economic uncertainty and higher interest rates cut into payouts.

However, a recovery in corporate bond markets, stock market rallies and a modest rise in deal-making improved the outlook this year.

However, industry experts believe financial firms aim to remain cautious with costs despite the improved business environment, focusing on steady growth into 2025.

Big bonuses can also mean a big boon for the New York economy. The state will make money from taxes on bonuses. Last year, banks and their staffers contributed 27% of the state’s tax collections, or $28.8 billion.