By Tatiana Bautzer
NEW YORK (Reuters) - Bonuses for investment bankers advising companies on mergers and acquisitions are expected to drop by 15% to 25% this year from 2022, according to a study by Johnson Associates, a compensation consultant in New York.
Commercial and retail bankers at regional banks will receive bonuses that are 10% to 20% lower than the previous year, the report showed.
"Most Wall Street professionals will have to wait another year for a rebound,” said consultant Alan Johnson. "With the financial markets and overall economy struggling to find footing throughout the year, most business segments remain under pressure to keep compensation costs down."
But there are some exceptions. Investment bankers working in equity underwriting are projected to receive payouts that are 5% to 15% higher than last year, while wealth managers could receive awards that are 5% higher. Retail or commercial bankers working in large institutions could see year-end bonuses stay flat or rise about 10%.
"Looking ahead, 2024 is unfortunately expected to be another challenging year," as higher interest rates and geopolitical uncertainty restrain activity, the consultant wrote. "Headcount and staffing models are being evaluated" as turnover declines and companies divide smaller bonus pools based on performance.
Bonuses for debt underwriters are expected to stay flat or drop as much 10%, while payouts for equity trading could fall 5% to 10%.
Finance professionals working in fixed income trading, hedge funds, private equity firms and asset managers can expect flat bonuses or small gains or losses, according to the estimates.