Wall Street bankers will get bonus bonanza for second straight year, top consultancy says

Wall Streeters’ bonuses are set to grow for the second straight year, fueled by a rebound in trading and advisory revenues, rising stock markets and a strong finish to 2025, according to a new report from compensation consulting firm Johnson Associates.

The top consultancy stated equity and trading desks will see the biggest rewards, with payouts projected to jump between 15% and 25% from last year. The boost comes as investors have been forced to reorganize their portfolios amid ongoing global trade tensions linked to President Trump’s tariffs.

Johnson correctly predicted chunkier payouts last year, after the US economy began to roar back following three years of COVID-ridden, debt-laden economic malaise.

The study said bonuses for investment banking and M&A advisory bankers will rise between 10% and 15%, while asset managers, fixed-income traders and debt underwriters will receive smaller but still meaningful increases ranging from 12% to 15%.

“Wall Street and most of the financial services industry will once again be bullish when firms hand out year-end bonuses,” said Alan Johnson, managing director of Johnson Associates.

“The industry has rebounded from a dismal first quarter and is on track to finish 2025 strongly despite continued geopolitical uncertainties and tariffs,” he added.

Johnson’s report jibes with New York State Comptroller Thomas DiNapoli’s office, which recently predicted that Wall Street will see record bonuses this year.

The latest analysis projects broad gains across nearly every corner of finance, marking a stark contrast to the lean bonus years earlier in the decade.

Johnson forecast traditional asset management firms to award 7% to 12% higher incentives, supported by a resilient equity market and strong inflows into active exchange-traded funds, the report said.

Wealth management advisers are also set for an 8% to 10% bump as client demand and competition for top talent drive pay upward.

Hedge fund staffers are expected to pocket bonus increases ranging from 2.5% to more than 10%, with long-biased and proprietary trading strategies outperforming others.

Private equity and insurance professionals will see smaller increases, generally up to 5%, the report said.

Only real estate professionals are expected to see flat compensation this year, amid weak deal activity and higher financing costs.

Johnson Associates said the results reflect “felt impact” — meaning increased incentive pools even as overall headcount remains flat — a trend driven by efficiency improvements and restrained hiring.

The report said that headcount across major financial firms has climbed 77% since the 2008 financial crisis, but warned that figure is expected to decline by 10% to 20% over the next five years as automation and artificial intelligence reshape operations.

“AI-led reductions will largely impact operational and entry-level roles, but most individuals and firms must evolve,” the firm wrote. “Pay pools will accrue more to the remaining staff.”

Despite this year’s optimism, Johnson warned that firms are entering 2026 with “measured caution” amid signs of a slowing global economy, elevated asset valuations and rising credit risks.

“Demand for talent will remain resilient in select areas, particularly private wealth, where top producers continue to command premium compensation,” said firm founder Alan Johnson. “Firms seeking growth beyond their core offerings will need customized but adaptive pay strategies.”

Johnson Associates’ quarterly compensation survey is one of the most closely followed barometers of financial industry pay.

It draws upon proprietary data, as well as public filings from major banks and asset managers.

While incentive levels have returned to or exceeded 2021 peaks in most sectors, total pay remains below inflation-adjusted highs, according to the report.

Johnson Associates’ latest forecast came as hard-left New York City mayoral frontrunner Zohran Mamdani plotted a tax grab on financiers to fund his Democratic socialist policies, which include free buses and government-run grocery stores.  

Still, for many on Wall Street, 2025 is shaping up as a rewarding year.

“It’s not exuberance,” Johnson said. “It’s relief — and a return to healthy business performance.”