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Mergers and acquisitions slowed this year, and companies delayed
going public, which pressured bank fees. Increased regulation
has also made trading less profitable for banks.
Overall year-end incentives, which include cash bonuses and
equity awards, may decline on Wall Street across the board by 5
percent to 10 percent from last year, the report said.
"All signs are pointing to a disappointing end to an overall
lackluster year on Wall Street,” said Alan Johnson, managing
director of Johnson Associates, which conducted the study.
Investment bankers, who help companies raise debt and equity,
may experience the biggest drop, with their bonuses falling 10
percent to 20 percent.
Equities traders may draw payouts that are 5 percent to 15
percent smaller, as investors shied away from trading stocks,
which are generally viewed as riskier than bonds.
Debt traders will fare slightly better, with their bonuses
expected to be down 10 percent to flat. Bond trading rebounded
at most large banks during third quarter, reversing a slump that
has plagued Wall Street for years.
Even mergers and acquisition bankers, who enjoyed a banner year
for deals in 2015, could see bonuses that are 5 percent to 10
percent lower.
The only professionals on Wall Street who may see higher bonuses
are retail and commercial bankers, with a flat to 5 percent
rise.
Banks set aside around roughly 40 percent of revenue for
employee pay and benefits, around the same as last year, Johnson
Associates found.
Johnson said that 2017 could be another difficult year for
bonuses, amid ongoing fee pressure and regulation.
(Reporting by Olivia Oran in New York; Editing by Steve Orlofsky)
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