US banker bonuses set to slide while traders benefit: study

BONUSES for Wall Street bankers are projected to plunge as much as 45 per cent this year as business dries up.

Payouts for investment bankers who underwrite deals will probably drop 40 per cent to 45 per cent this year, while incentive compensation for those advising on transactions is estimated to fall 20 per cent to 25 per cent, according to compensation consultancy firm Johnson Associates.

"Headcount will decrease as firms scale back after increasing headcount in 2021 and into 2022," Alan Johnson, a managing director at the consultancy, wrote in a report.

US banking giants reported sharp declines in their dealmaking businesses in the second quarter. But the rout in equity markets and surging volatility across financial markets sparked a flurry of client activity that boosted trading revenue.

Fixed income traders and salespeople will probably get pay bumps of 15 per cent to 20 per cent, while bonuses for stock traders could rise 5 per cent to 10 per cent, according to the report. REUTERS