Equities Traders, Underwriters on Track for Biggest Bonus Bumps

Equities traders and underwriters are on track for the biggest bump in bonuses this year, thanks to the flurry of blank-check companies that have debuted on public markets, according to compensation consultant Johnson Associates Inc.

Incentive compensation for equities traders may climb as much as 30% while underwriters could see a 40% jump, Johnson said Thursday. Stock underwriters -- who worked on a record number of special-purpose acquisition companies in the first three months of the year -- are “significantly outperforming” their counterparts in debt capital markets, the consultancy said.

Mergers-and-acquisition bankers are poised to see a jump in bonuses of 15% to 20%, Johnson said. Fixed-income traders are also on track for a boost in pay. Bonuses are typically awarded after year-end and changing market conditions in coming months could alter the compensation picture.

“Combining the remarkable business recovery and with stock-market highs, financial services incentive compensation is expected to increase meaningfully for 2021,” said Alan Johnson, managing director at Johnson Associates, said in an emailed statement.

Wall Street’s traders and investment bankers just handed in their best first quarter ever, helped by the record issuance of blank-check companies and continued volatility in markets brought on by the pandemic.

Still, banks were plagued by weak demand for loans even as deposits soared. So retail and commercial bankers are poised to see their incentive compensation fall by as much as 10%, Johnson found.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.