Wall Street professionals are on track for larger bonuses this year, but it may not last.
Financial firms will award year-end bonuses of up to 20% larger this year versus last year, according to an analysis released Monday by Johnson Associates, a New York-based compensation consulting firm. Equities traders, investment-banking underwriters and private-equity professionals are expected to receive the largest increases.
“The major investment and commercial banking firms continued their strong performance, especially in equities trading and underwriting,” said Alan Johnson, managing director of Johnson Associates and one of the nation’s foremost authorities on Wall Street compensation. “Private-equity firms also turned in a second straight year of healthy financial results and strong fundraising.”
Private equity professionals, investment banking underwriters and those in staff and management positions will receive a bump of 5% to 10% over last year.
The largest increases — 15% to 20% — are projected for equities sales and trading professionals. Private-equity professionals, investment-banking underwriters and those in staff and management positions will receive a bump of 5% to 10% over last year. Investment-banking advisers are the only Wall Street professionals who may see a decline in bonuses (flat to 5%).
Johnson said 2019 is looking less rosy. “Ongoing business challenges, including fee compressions, geopolitical influences and business efficiencies driven by technology, are likely to have an industry-wide, downward impact on compensation and head count,” he said. “While financial-sector businesses are still inherently healthy, the business challenges are expected to catch-up with them.”
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Median total compensation for CEOs
Financial firms will award year-end bonuses of up to 20% larger this year versus last year, according to an analysis released Monday by Johnson Associates, a New York-based compensation consulting firm. Equities traders, investment-banking underwriters and private-equity professionals are expected to receive the largest increases.
Since 1985, Wall Street bonuses soared 890%, seven times the rise in the federal minimum wage, according to data by the New York State Comptroller and analyzed by the Institute for Policy Studies, a left-wing think tank in Washington, D.C., released last year. The average Wall Street bonus rose 1% to $138,210 last year, more than twice the median U.S. household annual income.
Since 1985, Wall Street bonuses soared 890%, seven times the rise in the federal minimum wage. Chief executive pay in the U.S. is among the highest in the world.
Chief executive pay in the U.S. is among the highest in the world, according to a May 2018 report by the staff of Keith Ellison, the Attorney General-elect for Minnesota. U.S. publicly-listed companies have begun releasing how much their CEOs make compared to the rest of their staff as required under a 2015 rule in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Ellison requested that his staff examine the ratios of the first 225 Fortune 500 companies to publicly disclose their CEO pay. Median-salaried employees in all but six companies would need to work for 45 years to earn what their CEO makes in one year. Two-thirds of the top 1% of U.S. households are headed by corporate executives, the report — “Rewarding or Hoarding?” — found.
Income inequality has soared in the U.S. over the last five decades, despite increases in worker productivity, the report said. “Incomes for most Americans have been stagnant for four decades,” the researchers wrote. “Instead, this increase in income inequality was almost entirely driven by soaring compensation levels for the top 1% of income earners.”
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