Wall Street bonuses poised to hit record highs as banker shortage slams industry
Bonuses on Wall Street are expected to hit records this year as financial giants like Goldman Sachs and JPMorgan grapple with a dire lack of bankers, even as demand for dealmaking continues to surge.
After winning significant salary bumps this year, Wall Street financiers can now expect a double-digit increase in year-end bonuses — a jump not seen since before the Great Recession, according to new data from compensation consulting firm Johnson Associates.
With a historic tide of mergers, IPOs, spinoffs and other big strategic deals continuing to flow, bonuses for investment bankers will see the steepest jump, seeing a 30 to 35 percent increase in their bonuses from 2020, according to the firm.
As the stock market surges to unprecedented heights, equity sales and trading and investment banking advisors will also get a healthy bonus bump — of 20 to 25 percent more than last year, according to the data. Asset management professionals, including those managing hedge funds and private equity funds, will see a more modest bump – around 15 percent, Johnson Associates said.
The ballooning payouts come as banks like Goldman Sachs and JPMorgan have posted record earnings as the economy comes roaring back to life. At the same time, Wall Street bankers have faced increasingly punishing work weeks — along with a wider range of options as the pandemic continues to upend career expectations, said Alan Johnson, the firm’s managing director.
“If you don’t get the pay right for your own people, you can’t recruit,” Alan Johnson, managing director of Johnson Associates told The Post. “It’s the hottest labor market since the financial crisis and the musical chairs will continue well into next year.”
But it may not be enough to keep financiers from eyeing the exits, recruiters told The Post.
“It’s not unusual for analysts and associated to start shopping themselves after they get their bonuses each year,” John Breault, CEO of recruiting firm Breault & Smith told The Post. “But this year is dramatically different because they have so much leverage in terms of the market. People aren’t just demanding money, they’re demanding better quality of life.”
And some traditional firms, like Goldman Sachs, may quietly make moves to accommodate lifestyle considerations. Recruiters told The Post Goldman Sachs and JPMorgan will set the expectation that people need to come into the office. But they’ll be willing to work around employees they really want to keep or hire.
“Everyone will make exceptions when it comes to working from home,” Johnson added.
The talent shortage also points to an unprecedented bonus bonanza that will rain cash on bankers, according to Johnson. For senior bankers a double-digit bonus increase can be worth hundreds of thousands — or even millions of dollars, he said.
In March, a leaked slideshow presentation compiled by 13 junior Goldman Sachs analysts detailed complaints about 100-hour workweeks. Some griped of shifts as long as 20 hours that left them little time to eat, sleep or shower, claiming that the grind damaged their physical and mental health.
The complaints led Goldman and JPMorgan to vow to hire more staff with the latter pledging to boost its headcount by 200. Private equity firm Apollo Global Management has reportedly offered some associates as much as $200,000 to stick around.
Elsewhere, Citibank CEO Jane Fraser told employees she was banning Zoom meetings on Fridays to address Zoom fatigue. Investment bank Jefferies even offered its junior staff the primo Peloton bike as a “thank you” for working long hours.
