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Deal makers, PE staff may get biggest bonus hikes: Johnson Associates

Wall Street opened slightly higher as US data indicated a strengthening economy and the European Central Bank pledged to beef up or prolong its stimulus program.

[NEW YORK] Deal makers and employees at private equity firms are expected to receive the biggest bonus increases this year on Wall Street, according to a forecast by compensation consulting firm Johnson Associates.

Overall, however, year-end incentive payments on Wall Street are expected to be broadly flat compared with last year, the consulting firm said.

Advisers for mergers and acquisitions (M&A) can expect a 10-20 per cent rise in bonuses this year, and private equity employees can expect a 10-15 per cent increase, Johnson Associates said.

Global M&A activity hit US$2.64 trillion by the end of July this year, up 41 per cent from the same stage last year, led by a 66 per cent surge in the United States, a 74 per cent jump in China and a more than two-fold increase in deals in Britain.

Equity traders can expect bonuses to remain flat or rise by as much as 10 per cent this year, while professionals in the volatile and risk-heavy business of fixed-income trading can expect bonuses to remain flat or fall by as much as 10 per cent, according to the forecast.

Bonuses for asset managers are also expected to remain flat or rise by as much as 5 per cent.

Investment banking underwriters could remain flat or decline by as much as 10 per cent, Johnson Associates said.