Bonus season on Wall Street is looking grim for bankers in an industry hobbled by rising interest rates, bank failures and a dealmaking slump. Next year will probably be no better.
Merger advisers could see their payouts for 2023 slide as much as 25 percent, according to a report from compensation consultant Johnson Associates Inc. At regional banks, year-end compensation for professionals in retail and commercial businesses could fall 10 percent to 20 percent, the company found.
“Pay statements will be down moderately for most, in another disappointing year,” Alan Johnson, managing director of Johnson Associates, said in an interview. Inflation will also make the declines seem even more dramatic, he said, as costs continue to rise.
Even though bonuses will probably drop, relative pay is still high in financial services when compared to the rest of the global economy. Indeed, it’s not all doom and gloom. Some professionals — including those involved in equity underwriting and wealth management — could see a modest bump. Bigger is also often better, with retail and commercial bankers at major global banks seeing their pay flat to up 10 percent, rather than down like at the regionals.
“Regional banks were suffering, especially the big holders of real estate debt and longer-dated bonds that are underwater,” Johnson said.
