Wall Street bonuses projected to dip sharply amid declining revenues and deal flow

“Most Wall Street professionals will be quite disappointed and surprised when they receive their year-end bonuses,” said Alan Johnson, managing director of Johnson Associates, in a release issued in conjunction with the study. “Just one year removed from record profits and bonuses, firms tightened their belts on compensation as revenue declined, M&A activity slowed, IPOs dried up, and economic headwinds showed no signs of abating.”

Looking ahead to 2023, Johnson anticipates “challenging business conditions” as inflation and economic uncertainties continue to weigh on markets.

“Given the dynamics, 2022 compensation decisions should be strategic and mindful of the dual year impact when sizing awards and establishing budgets, headcount, and retention needs,” Johnson said.

However, despite the expected declines in bonus payments, base salaries at financial services firms are expected to increase 4% to 5% for the second consecutive year, the report noted. Overall headcount is expected to be up in 2022 compared to 2021, but likely to be flat or even decline in 2023 compared to 2022.

“On base salaries, we are seeing 4% to 5% budget increases for 2023 as firms aim to be competitive and partially mitigate inflation,” a Johnson spokesman added by email.

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