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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.
(Reporting by Matt Scuffham; Editing by Nick Zieminski)
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