If you are expecting a fat bonus this year, think again. The payouts this bonus season are expected to be dismal or nonexistent, according to a survey by the Wall Street Journal and compensation management consultant firm Challenger, Gray & Christmas.
The survey found that 34% of the 200 small, midsize and large companies polled will not be paying out year-end bonuses this year, up 7% since last year. Large corporations in various sectors, including Microsoft, Walgreens Boots Alliance and Meta, have advised their staff that there may be little to no bonuses this year.
The report comes off the heels of a challenging year for white-collar professionals, marred by layoffs still continuing through December. With contracting inflation and an employer’s job market, bosses are less inclined to use bonuses as a retention incentive.
Wall Street, in particular, could see a lackluster bonus season due to a decline in trading and deal-making activity. Payouts are expected to plummet by 25% this year for investment bankers, according to Johnson Associates, a compensation consulting firm for the financial services sector. Bonuses for equities traders are projected to fall 5% to 10%. Regional banks took a major hit this year after the collapses of Silicon Valley Bank and Signature Bank. Bonuses for commercial and retail bankers at these midsize firms will decline by 10% to 20% compared to last year.
JPMorgan and Citigroup are expected to maintain flat or slightly decreased bonus pools for their traders. Meanwhile, Goldman Sachs Group and Bank of America are looking to provide modest bonus increases, Bloomberg reported.
Investment bankers working in equity underwriting will see 5% to 15% increases in payouts, while bonuses for wealth managers are expected to be 5% higher than last year, according to Reuters reporting.
Despite the bright spots for bankers in equity underwriting or wealth management, “Most Wall Street professionals will have to wait another year for a rebound,” said Alan Johnson, managing director at Johnson Associates. “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.”
Source: Forbes
