Wealth management bonuses to increase, bankers hit hard
Bonus season on Wall Street is looking grim for bankers in an industry hobbled by rising interest rates, bank failures and a dealmaking slump. Next year will probably be no better.
Merger advisers could see their payouts for 2023 slide as much as 25%, according to a report Tuesday from compensation consultant Johnson Associates Inc. At regional banks, year-end compensation for professionals in retail and commercial businesses could fall 10% to 20%, the company found.
“Pay statements will be down moderately for most, in another disappointing year,” Alan Johnson, managing director of Johnson Associates, said in an interview. Inflation will also make the declines seem even more dramatic, he said, as costs continue to rise.
Even though bonuses will probably drop, relative pay is still high in financial services when compared to the rest of the global economy. Indeed, it’s not all doom and gloom. Some professionals — including those involved in equity underwriting and wealth management — could see a modest bump. Bigger is also often better, with retail and commercial bankers at major global banks seeing their pay flat to up 10%, rather than down like at the regionals.
“Regional banks were suffering, especially the big holders of real estate debt and longer-dated bonds that are underwater,” Johnson said.
A separate report that Options Group released Tuesday found similar trends. The firm said investment bankers will see the biggest hit to compensation, down almost 22%, while wealth management workers can expect gains of about 5%.
“While it’s been a tough year, the cost of replacement is high on several levels and not just financially, but also considering the impact on overall client business and team morale,” Michael Karp,
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