Bankers' bonuses to rise most on Wall Street

Bank executives' compensation will rise the most among all financial sectors on Wall Street, as record revenues on trading and deals boost bonuses, according to Johnson Associates, a financial compensation consultancy.

In a report published on Wednesday, the consultancy projects bonuses for equity traders and equity capital markets bankers rise 20% to 30% this year. Investment bankers working on M&A transactions are expected to have bonuses 15% to 20% higher this year.

"Most of the excitement is coming from the equity side, with stock markets at record highs and volatility increasing trading volume," said Alan Johnson, the consultancy's founder.

This year will be very good for Wall Street compensation, a "pleasant surprise", according to Johnson, despite the U.S.-Israeli war on Iran, inflationary pressure and interest rate volatility.

Executives in private credit will probably receive bonuses flat to 10% smaller, according to the consultancy projections, after some fraud cases led to large redemption requests from retail clients.

Large private equity portfolios are expected to slightly raise bonuses, between 2.5% to 7.5% this year. Executives working at medium private equity portfolios or real estate will see flat incentives.

"Private equity is treading water, trying to make profitable exits from companies that were acquired at high prices," Johnson added.

Executives trading fixed income instruments could have bonuses 7.5% to 12.5% higher, and investment bankers underwriting bonds and loans may increase their compensation by 5% to 10%. Margins on fixed income are lower and compensation had risen in previous years, Johnson added.