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Bigger Bonuses on Way for (Almost) Everyone on Wall Street

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Wall Street stock traders, money managers, commercial bankers, underwriters and even bean counters are poised for bigger year-end bonuses.

But if you advise on mergers and acquisitions, sorry.

For a second straight year, much of the industry will get “moderately” higher incentive payouts in coming months, according to a closely watched annual report released Monday by compensation consultant Johnson Associates Inc.

Its projections for raises of as much as 20 percent show jittery markets can be hard on people who help companies execute takeovers, but not so much for stock traders and investors making long-term bets:

  • Equities sales and trading, 15-20%;
  • Private equity, 5-10%;
  • Investment banking underwriting, 5-10%;
  • Corporate management, 5-10%;
  • Hedge funds and asset management, 5%;
  • Fixed-income sales and trading, 0-5%;
  • High net worth, retail and commercial banking, 0-5%; and
  • Investment banking advisory -5- 0%.

“There was a lot of day-to-day stuff and that’s where these traders make money — in the volatility,” Alan Johnson, managing director of Johnson Associates, said in an interview. “It’s not like they were extremely volatile, but more so than in recent years.”

Private equity managers benefited from inflows, while stock and bond salespeople had a busy year, according to the report. Financial firm managers — a category that includes business heads, controllers, senior attorneys and other staff — are also set for bumps.

The U.S. tax overhaul that Republicans pushed through last December bolstered profits at the nation’s largest banks.

Investment banking advisers may suffer the only cut, according to the survey. Still, that business typically pays the highest bonuses on an absolute basis, Johnson said.

The good times may not last.

“We’re not seeing 2019 as rosy,” Johnson cautioned. The report predicts banks will probably face geopolitical turbulence and pressure to lower fees next year, while new technology eliminates jobs and makes it easier for firms to pay less.