Wall Street professionals can expect a notable boost in year-end incentive payments for 2024, with most areas of the financial services industry experiencing increases, according to compensation consultancy Johnson Associates. According to Pensions &  Investments, the report projects significant hikes in cash bonuses and equity awards, marking the first substantial bonus growth since 2021.

Investment banking debt underwriters are expected to see the largest increases, with a projected 25 percent to 35 percent rise in year-end incentives. Equity underwriters in investment banking follow closely, with bonuses anticipated to increase by 15 percent to 25 percent. Hedge fund professionals could see bonuses climb by 5 percent to 15 percent, and asset management employees may receive a 7 percent to 12 percent boost, partly fueled by stock market gains and active ETF inflows. Private credit and private equity firms also anticipate moderate increases, with private credit labeled as a "hot sector" for talent, as reported by Pensions & Investments.

Johnson Associates managing director Alan Johnson noted, "virtually every sector in the industry is performing strongly this year, with the exception of retail and commercial banking." Johnson emphasized that strong performance and market conditions allow firms to reward professionals after several challenging years.

Looking forward to 2025, Wall Street firms remain optimistic, especially regarding mergers and acquisitions. Pensions & Investments reports that market stability, growth in asset management, and the expansion of alternative investments are expected to continue shaping the competitive compensation landscape, despite potential headwinds from fluctuating interest rates.

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