Proactive Investors - Investment bankers who advise enterprises on mergers and acquisitions are set to see their bonuses drop by 15% to 25% year-over-year in 2023 amid a dealmaking slump, according to a study by New York compensation consultant firm Johnson Associates.
Commercial and retail bankers at regional banks will see their bonuses come in 10% to 20% lower than last year.
Debt underwriters are forecast to see their bonuses stay flat or drop 10% and payouts for equity trading are expected to decline between 5% and 10%.
"With the financial markets and overall economy struggling to find footing throughout the year, most business segments remain under pressure to keep compensation costs down,” Johnson Associates wrote in its report.
“Incentive payments throughout the industry will be mostly lower to flat with three notable exceptions — large commercial and retail bankers, investment banking equity underwriters and wealth management pros, who can expect a bump this year.”
According to the report, investment banks in equity underwriting should see their bonuses rise 5% to 15% year-over-year, wealth managers should see 5% higher payouts and retail or commercial bankers in large institutions should see their bonuses stay flat or rise 10%.
The firm also expects 2024 to be another challenging year as headcount and staffing models are being evaluated amid higher interest rates and geopolitical uncertainty.
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