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Here's how bad banking bonuses will be this year

You don’t need us to tell you again; banking has been having a bad year. Advisory fees down, bad market conditions, and so on. But how bad is bad – and how badly does it affect your bonus?

Well, it depends. Johnson Associates, the New York-based compensation consultancy firm, has released expected end-of-year compensation figures based on its analysis.

The result is not good unless you’re a trader. Fixed income traders will be best off, with predicted bonus increases of 15% to 20%. Equities bonuses are expected to be flat. 

Underwriters are expected to take the largest hits. Johnson Associates says bankers in debt capital markets (DCM) and equity capital markets (ECM) are likely to experience 40%-45% bonus cuts. M&A advisory bonuses are expected to be down 15% to 20%.

The pain doesn’t stop this year. Johnson Associates' projections “anticipate challenging business conditions, inflation, and economic uncertainty to continue into 2023… compensation decisions should be strategic and mindful of the dual year impact when sizing awards and establishing budgets, headcount, and retention needs.”

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AUTHORZeno Toulon

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