(Reuters) - Bonuses for a large share of Wall Street workers are expected to fall up to 25% this year and job cuts are likely to continue into 2021, a report by compensation consulting firm Johnson Associates Inc said.
Workers in the retail and commercial divisions of many large banks are expected to see lower bonuses as banks have had to set aside billions in reserves to cover loan defaults due to shutdowns and unemployment caused by the COVID-19 pandemic.
However, those estimates were less severe than the up to 30% cut Johnson projected in August. (https://reut.rs/2ZHNLxH)
Workers in insurance and asset management could see a 10% to 15% fall in bonuses this year, according to the report, which is closely watched by financial professionals.
Johnson estimates the industry headcount to be 10% lower in July 2021, compared to February 2020, while compensation for chief executives will also face more scrutiny this year.
Traders at major banks, however, could see their bonuses surge up to 30% this year, the report said, as they handle record-high volumes of transactions from investors looking to benefit from the volatile capital markets.
Underwriters and workers in fixed income departments could also see their bonuses improve, the report said.