© Reuters. FILE PHOTO: A street sign for Wall Street is seen in front of the New York Stock Exchange in Manhattan, New York City
NEW YORK (Reuters) – Year-end bonuses for most Wall Street workers are likely to decline this year compared to 2019 due to the impact of the impact of COVID-19 on the US economy, compensation company Johnson Associates Inc said Thursday.
Overall, towards the end of this year, incentives, which include cash awards and stock awards, will generally decline. This is the second year in a row that predominantly smaller prizes are awarded, as the study shows.
Private and commercial bankers will be hardest hit. Their year-end incentive payments are expected to decrease by at least 25% to 30% year-over-year, while investment banking advisors can expect their payments to decrease by as much as 15% to 15% by 20%.
Payments to asset managers, hedge funds and private equity employees are expected to decrease by 5% to 10% compared to the previous year.
"The pandemic has wreaked havoc in many parts of the US economy this year, and the financial services industry is no exception," said Alan Johnson, chief executive of the company that produced the report.
While private and commercial bankers and wealth management company employees saw declines, bond and stock traders benefited from volatile markets that are driving trading activity.
Fixed income sales and trading employees are expected to increase their bonuses by at least 40% to 45%, while those working in stock sales and trading are expected to increase their payouts by 20% to 25%.
"Fixed income professionals are amply rewarded as uncertainty and high volatility contributed to the record trading," said Johnson.
Johnson believes the pandemic will continue to weigh on the financial services sector as a whole in 2021, but possibly to a lesser extent than in 2020. The downsizing is expected in the first half of the year, he said. Early predictions point to modest salary increases and flat to slightly increased bonuses.
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