Back in March, the man responsible for keeping tabs on all the taxes New York State enjoys when Wall Street has a bumper year offered an ominous prediction: This year’s bonuses would pale in comparison to last year’s. Comptroller Tom DiNapoli warned I-bankers that they’d probably have to make due with about 17% less in ’22.
Well, compensation consultants Johnson Associates also make it their business to know how enticing incentive packages will be, and they think DiNapoli is being downright bullish.
Johnson associates projects bank underwriters will see bonuses slump 35% to 40% — essentially taking bonuses to 2020 levels…. “Deals and IPOs are cyclical — we were expecting a hangover for 2022 but it’s worse than imagined,” Alan Johnson of Johnson Associates told The Post. “That’s brought deal making to a stop — and on top of that there’s a good chance we’re going into a recession.”
Johnson is quick to note that even a minimal dropoff in pay will feel dramatic given record inflation. “If pay is down 15% that’s going to feel like 22% or 23%,” Johnson adds.
As usual, there’s a way to avoid an even colder winter than the temperatures suggest, and that’s to get a new job—preferably in private equity.
Bonuses at hedge fund and large private equity firms are expected to stay largely flat as investors look to these alternative investments amid challenging market conditions. Asset management professionals, and those working with ultra higher net worth individuals, will see a decline of around 10% to 15%.... Equities traders will see a more modest bump of 5% to 10% this year. Fixed income, which reported disappointing earnings across the board in 2021, is expected to make up for last year’s losses — with traders making 15% to 20% more this year.