Latest news with #JohnsonAssociates
Zawya
a day ago
- Business
- Zawya
Big bonus season ahead for traders: IFR
It is a great time to be trading equities. Banks are reporting record revenue and traders may see record bonuses, according to pay analysis firm Johnson Associates. Incentive pay for equity traders for 2025 could rise between 20% and 30%, Johnson said in its latest compensation report. That's on top of lofty levels last year. That tracks with the performance of top banks in the second quarter and first half of the year. Across the five biggest US banks, including Goldman Sachs, Morgan Stanley and JP Morgan, revenue from equities trading was up 27% in aggregate in the first six months of the year. Traders got a big assist early in the second quarter when president Donald Trump's administration unveiled a new trade and tariffs policy on April 2, boosting market volatility. Equity trading revenue soared to a record US$4.3bn at Goldman in the second quarter, and top rivals were not far behind, with banks citing volatility and heightened engagement as key drivers of revenue gains. Fixed income traders are in line for the second-best bonus boost, with incentive pay projected to rise 10% to 20% this year, Johnson said. Revenue from fixed income, currency and commodities trading rose 10% in the first half of the year across the top five US banks. M&A bankers rebound Investment bankers may also have reason to smile by the end of the year. After a weak first quarter, pay estimates were sour for bankers in M&A advisory and equity underwriting. But that has turned around and Johnson has revised most of its pay estimates upward. "The updated projections are a marked shift from our first-quarter estimates, which reflected muted business activity amid tariff uncertainty and declining equity markets," Johnson said. "While geopolitical concerns remain, equity markets have rebounded sharply and optimism is building, lifting sentiment across asset management, investment banking, and certain illiquid alternative strategies." Johnson expects advisory bankers could see bonus pay for 2025 rise 5% from awards for 2024. Revenue from advisory was up 21% in the second quarter and up 15% for the first half of the year across the top banks. Independent banks, including Evercore, Lazard, PJT Partners, Moelis and Perella Weinberg Partners, underperformed bulge-bracket peers in the quarter and their advisory revenue rose 14% in Q2, but matched bulge-bracket rivals with a 15% increase for the first half. Incentive pay for ECM bankers is expected to be flat to down 5% this year as IPO activity remains muted, according to Johnson. While that is not a great outlook, it is better than the previous prediction when it forecast ECM incentive pay to fall as much as 20%. Across the top five US banks, ECM revenue was up 9% in the April–June quarter from a year earlier, but down 3% for the first half of the year. Johnson expects debt underwriting bankers could see bonus pay for 2025 rise 5% to 15% from last year as debt issuance continues to trend higher on refinancing needs. DCM revenue across the top five US banks was up 3% for the first half. Bankers in global retail and commercial banking could see pay fall as much as 5%, according to Johnson, citing concerns over consumer credit stress. For general corporate banking employees, bonus pay is likely to be flat to up 5% as banks tighten expenses. "Firms continue to focus on long-term expense management, with AI-driven efficiencies prompting increased scrutiny of staffing levels and compensation structures," Johnson said. "As automation accelerates, firms are reevaluating how and where talent is deployed across the organisation." Traders are not the only ones expected to benefit from swollen trading profits. Bonuses for management could be flat to up 10%, as strength in trading propels business results, Johnson predicted.
Yahoo
05-08-2025
- Business
- Yahoo
Wall Street bonus update: Who's winning in banking and private equity
A new report predicts who's ahead in the race for year-end bonuses on Wall Street. Private credit is faring better than private equity, and traders are in for big payouts. The report was compiled by the compensation consultancy Johnson Associates. The M&A recovery may look strong on paper, but that doesn't guarantee generous bonuses for dealmakers. A new compensation report from Johnson Associates shows traders riding a wave of volatility to bigger year-end bonuses while many private equity professionals and M&A bankers brace for another year of stagnant or shrinking pay. Equities traders are on track to notch bonus gains of 20% to 30% this year, while fixed income desks could see increases of 10% to 20%, the compensation consultancy's report released Tuesday said. Debt underwriting is benefiting from a spike in refinancing demand, with payouts forecast to rise 5% to 15%. However, bonuses for M&A advisors are forecasted to be flat to up about 5%. That's a long way off from what dealmakers expected coming into 2025, but perhaps better than they might have believed in April as tariff fears mounted. Last year, Wall Street bonuses overall surged by 34% to $47.5 billion, the highest total on record, according to a report from Thomas DiNapoli, the New York comptroller. This year, M&A and IPOs have been muted as companies waited to assess the impact of President Donald Trump's tariffs and other policy changes. "It was dead in Q1" for mergers and acquisitions, said Chris Connors, a principal at Johnson Associates, adding, "but there was a recovery in the second quarter." Among alternatives, private credit is expected to be the breakout winner. Bonuses for private credit professionals are forecast to climb between 2.5% and 7.5% as investor demand surges and firms jostle to hire top talent. Johnson's report, however, warned that private credit's hiring spree is vulnerable to risks. "Private credit has certainly reached bubble territory in terms of fundraising, investor demand, the talent market," Connors said. "It hasn't quite yet popped, but I do think cracks are showing," he added. Bonus increases will be lower in traditional private equity. Large-cap funds are expected to hold pay steady, but mid- and small-cap firms could slash bonuses by up to 5%, according to the report, which blamed "fundraising difficulties" and questions around headcount levels. The Johnson Associates report also flagged broader risks that could further impact bonuses. "These are real concerns," Connors said of remaining geopolitical uncertainty and tariffs. He added that financial services firms, for the most part, "have been incredibly resilient in the face of all that." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
05-08-2025
- Business
- CTV News
Wall Street traders will get fatter bonuses after riding volatile markets, consultancy says
A group of traders work on the floor of the New York Stock Exchange, Monday, April 14, 2025. (AP Photo/Richard Drew) NEW YORK — Wall Street stock and bond traders can expect their bonuses to jump 10 to 30 per cent this year as they cashed in on turbulent markets, according to a quarterly report by compensation consultancy Johnson Associates. 'All the uncertainty around the tariffs and the continuous upheaval favors volatility and traders,' said the consultancy's founder, Alan Johnson. Other financial employees will not fare as well, with compensation expected to be flat or slightly higher, according to the report. Wealth management and hedge fund executives are estimated to see bonus increases of up to 5 per cent for 2025, while asset managers will likely get bumps of 2 to 7.5 per cent, helped by recovering markets and inflows of client funds. 'Some of the worst effects of the unpredictable U.S. government policies have faded as markets rebounded,' Johnson said. He characterized 2025 as a 'regular' year for compensation, improving from the bad outlook when the new U.S. import tariff policy was announced. Payouts for investment bankers will likely remain muted, even though initial public offerings and M&A deals may rebound in the second half of the year, Johnson said. Because investment banking fees are paid when deals close, which can take months, the compensation for advisory bankers is expected to remain flat or rise a modest five per cent for this year. If the deal activity remains elevated, compensation could improve for 2026, Johnson said. Executives involved with secondary offerings within private equity funds have seen more activity, which could boost their compensation by 10 per cent. Private credit is another area in which payouts could climb 7.5 per cent as asset managers expand their lending activities. --- Reporting by Tatiana Bautzer; editing by Lananh Nguyen and Leslie Adler
New York Post
05-08-2025
- Business
- New York Post
Wall Street workers poised for bonuses to spike as much as 30% — bucking dire warnings
Wall Street workers are poised to start popping the champagne at the end of the year. Bonus checks are expected to soar by up to 30% in some financial sectors — despite earlier warnings that President Donald Trump's trade war would lead to a decrease by as much as 20% in extra pay, according to the latest report by Johnson Associates on Tuesday. With the markets chugging along at or near record highs after briefly convulsing following Trump's 'Liberation Day' rollout in April, the compensation consultant now predicts across-the-board increases for most finance workers. Advertisement 3 Wall Street commuters arrive amid a brighter bonus outlook for financial workers in 2025. AP 'The year will end up broadly positive, which is a big change from what we were thinking three or four months ago,' said Alan Johnson, who runs Johnson Associates. 'Financial services have fared pretty well, and benefited in some cases from the volatility, and the up markets.' Leading the charge are equity traders, who could see their bonuses jump by between 20% and 30% because of market volatility, according to the report. Advertisement Those who trade bonds and other fixed-income products are in line for padded paychecks of 10% to 20%, while debt underwriters are expected to get a bonus bump of between 5% and 15%. Workers in other sectors including retail and commercial banking, asset or wealth management, investment banking advisory and hedge funds could get up to a 7.5% increase, Johnson said. The positive outlook comes after Johnson Associates predicted that bonuses would fall by as much as 20% due to Trump's ongoing trade war — and the projections can fizzle if markets swoon in the second half of the year. Advertisement 3 Equity traders on the floor stand to gain the most, with bonuses expected to jump as much as 30%. AP The broad-based S&P 500 has gained roughly 7.9% year to date, while the tech-heavy Nasdaq has surged more than 9% — with both indexes repeatedly breaking their all-time highs in the past month. The blue-chip Dow Jones Industrial Average has ticked up by around 4% since the start of the year. Meanwhile, the nation's GDP rebounded from a 0.5% annualized contraction in the first quarter to 3% growth in the subsequent three-month period, and inflation has edged down from 3.0% in January to 2.7% in June. Advertisement Last year, the average annual bonus climbed by nearly 33% to $244,700, marking the first significant increase since the coronavirus pandemic. In total, the amount paid out in bonuses reached a record $47.5 billion, according to estimates from New York State Comptroller Thomas DiNapoli. 3 A bustling subway station near Wall Street reflects rising optimism in the finance sector. REUTERS Wall Street accounted for 19% of the entire state of New York's tax collection, and a total of 7% of the city's revenue year, underlining the industry's importance to the Big Apple, according to DiNapoli. There were 201,500 working in the New York finance industry, up from 198,400 the year prior and exceeding the previous peak seen in 2000. The staffing levels may begin to plunge as finance companies lean into artificial intelligence technology to cut costs. 'In the short term, it's going to reduce headcount: 'We're not going to need 10 analysts, we're going to need five,'' Johnson said. 'It will lead to efficiencies. And the people who remain will be paid even more.'
Yahoo
05-08-2025
- Business
- Yahoo
Wall Street traders will get fatter bonuses after riding volatile markets, consultancy says
By Tatiana Bautzer NEW YORK (Reuters) -Wall Street stock and bond traders can expect their bonuses to jump 10% to 30% this year as they cashed in on turbulent markets, according to a quarterly report by compensation consultancy Johnson Associates. "All the uncertainty around the tariffs and the continuous upheaval favors volatility and traders," said the consultancy's founder, Alan Johnson. Other financial employees will not fare as well, with compensation expected to be flat or slightly higher, according to the report. Wealth management and hedge fund executives are estimated to see bonus increases of up to 5% for 2025, while asset managers will likely get bumps of 2% to 7.5%, helped by recovering markets and inflows of client funds. "Some of the worst effects of the unpredictable U.S. government policies have faded as markets rebounded," Johnson said. He characterized 2025 as a "regular" year for compensation, improving from the bad outlook when the new U.S. import tariff policy was announced. Payouts for investment bankers will likely remain muted, even though initial public offerings and M&A deals may rebound in the second half of the year, Johnson said. Because investment banking fees are paid when deals close, which can take months, the compensation for advisory bankers is expected to remain flat or rise a modest 5% for this year. If the deal activity remains elevated, compensation could improve for 2026, Johnson said. Executives involved with secondary offerings within private equity funds have seen more activity, which could boost their compensation by 10%. Private credit is another area in which payouts could climb 7.5% as asset managers expand their lending activities. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
