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Thursday, November 12, 2020

Will Fundsters' EOY Bonuses Fall?

Reported by Neil Anderson, Managing Editor

Fundsters, your bonuses may take a bit of a hit this year, but other Wall Street niches may have it far worse.

This morning the Johnson Associates team released their expectations about financial services companies' year-end incentive payments. They predict that fundsters and other asset managers will suffer a five-percent bonus drop, on average. That's similar to the New York City-based team's expectations for bonus changes at large private equity firms and high network players.

On the one hand, fundsters look to be better off than many other Wall Street areas. The Johnson Associates team predicts that hedge funds will see bonuses fall five to ten percent, small private equity firms will see a ten percent drop, investment bankers in advisory will see a 15 to 20 percent drop, and retail and commercial banking will see a 25 to 50 percent drop.

Yet, on the flip side, those in fixed income sales and trading will see bonuses leap up by 40 to 45 percent, the Johnson estimates. Other big predicted winners include: investment bankers in underwriting, up 35 to 40 percent; and those in equity sales and trading, up 20 to 25 percent.

"The pandemic is wreaking havoc on many parts of the U.S. economy this year, and the financial services industry is no exception," states Alan Johnson, managing director of Johnson Associates. "And while many industry segments have bounced back, the majority of professionals at traditional and alternative asset firms as well as retail and commercial bankers will see smaller bonuses."

Johnson also looks ahead to next year.

"Headcount reductions will continue in the first half as companies transform and adapt," Johnson states. "For 2021, we expect some stabilization with early projections for modest salary increases, and flat to slightly increased incentives." 

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