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Most Wall Street workers to get lower 2020 bonuses: study

EconomyNov 12, 2020 08:15AM ET
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© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan, New York City

NEW YORK (Reuters) - Year-end bonuses for most Wall Street workers are expected to decline this year compared with 2019 due to the impact of the COVID-19 impact on the U.S. economy, compensation firm Johnson Associates Inc said on Thursday.

Overall, incentives at the end of this year, which include cash bonuses and equity awards, will generally decline, marking the second consecutive year of mostly smaller awards, the study shows.

Retail and commercial bankers will be the hardest hit, with their year-end incentive payments expected to decline at least 25% to 30% compared with last year, while investment banking advisors can expect to see their payments decline by as much as 15% to 20%.

Payments to asset management, hedge funds and private equity staff can expects payouts to be down 5% to 10% from the year before.

"The pandemic is wreaking havoc on many parts of the U.S. economy this year, and the financial services industry is no exception," said Alan Johnson, managing director of the firm that did the report.

However, while retail and commercial bankers and workers at asset managements firms have seen declines, fixed income and equities traders have benefited from volatile markets driving trading activity.

Workers in fixed-income sales & trading are expected to see bonuses increase by at least 40% to 45% while equities sales and trading staff can expect payouts to increase by 20% to 25%.

"Fixed-income pros will be rewarded handsomely as uncertainty and high volatility contributed to record trading," said Johnson.

Johnson anticipates the pandemic will continue to hurt the financial services sector, overall, in 2021, but perhaps to a lesser degree than in 2020. Staff cuts are expected in the first half of the year, he said. Early projections suggest modest salary increases and flat-to-slightly increased bonuses.

Most Wall Street workers to get lower 2020 bonuses: study
 

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Comments (8)
Josh Modern
JoshModern Nov 22, 2020 12:09PM ET
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where are my tissues?
Roger Miller
Roger Miller Nov 19, 2020 3:28PM ET
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With all the money printing programs by the Fed and debt fueled stimulus by the government, both of which involve Wall Street, I'm sure the record profits will enable them to get good raises in their base pay to more than make up for it.  Remember the government use Wall Street firms as their intermediaries, even more now, so Wall Street will generate substantial fees.
Thom Miller
Thom Miller Nov 19, 2020 1:56PM ET
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Well DUH! Doesn’t this go without saying?
Randy Randy
randy00 Nov 16, 2020 6:21AM ET
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When I worked in hi-tech bonuses were awarded when you did something special. They were not dependent on market conditions.
Bubba Born
Bubba Born Nov 13, 2020 10:27PM ET
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Bloodsuckers! Leeches! The "average" worker is lucky to have a job, let alone a COLA or bonus! The brokerage houses are the worst by perpetuating this farce!
Zach Lohman
Zach Lohman Nov 13, 2020 10:27PM ET
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Why are you on a finance app? You might be in the wrong place if you don’t like others making money, you making money, the USA making money, etc.
Thomas DeVito
Thomas DeVito Nov 13, 2020 10:27PM ET
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Says someone who is trying to make money they didn't earn off the stock market.
perplexed76 .
perplexed76 . Nov 12, 2020 1:17AM ET
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I think the "workers" should actually get double bonuses. To throw the markets up in the air amidst pandemic. Great job.
Bobster Bambino
Bobster Bambino Nov 12, 2020 12:57AM ET
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Hopefully Biden sticks it to them with a increased dividend tax
Thomas DeVito
Thomas DeVito Nov 12, 2020 12:57AM ET
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Lol okay. Increased taxes on the 2% average yield for dividends. That will raise millions in revenue.
Jesse Mulliniks
Jesse Mulliniks Nov 12, 2020 12:23AM ET
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I guess chad won’t be taking Becky to the hamptons. They’ll be going to the jersey shore instead.
Thomas DeVito
Thomas DeVito Nov 12, 2020 12:23AM ET
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Chad most likely still got his bonus.
 
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