Equities bonuses on Wall Street: the good news, and the bad
It’s bonus season on Wall Street, and while not every bank has announced for 2017 yet, information has started to trickle out about those that have.
Last month, Johnson Associates projected equities incentive funding to be flat to down by -5% and fixed income to sink by -5% to -10% year-over-year, while projecting IB underwriting bonuses to go up 15% to 20% or more. Have those projections come true? Here’s what we know so far, based on conversations with New York-based recruiters who asked to remain anonymous.
At Goldman Sachs, recruiters say the global equities bonus pool was down -4% compared to 2016, leading to "significant disappointment." Analysts and associates in equities at GS reportedly experienced a wide range – top-performers’ bonuses were up 20%, while some were flat, and many others were down by -5%
Things were better at J.P. Morgan There, recruiters claim the global equities bonus pool was up 2% and that in Asia Pacific bonuses were up between 5% and 10%,. Some top-performers in the U.S. prime brokerage business reportedly got bonuses that were up 5% or as much as 8% over last year.
Compared to 2016, recruiters say Morgan Stanley prime brokerage bonuses were flat, that research was up 5%, while sales and trading were down between -5% and -8%. There were quite a few promotions this year across all of the bank, and those who were promoted to VP or ED got a $75k kicker added to their base salary.
At Citi, the overall pool for equities was allegedly down at least -5% and as much as -8%. The bank didn’t make many promotions – in fact, it only promoted three equities executives to MD. Bonuses for equities researchers focusing on sectors that saw good volatility, including healthcare, were flat to up slightly, while some sectors were down.
Sarah Harte, executive director of global markets at Sheffield Haworth says bonuses across the market remain "fragmented" with some serious outliers among high performers. Harte says quants and research analysts in hot sectors like life sciences and biotech have been among the best paid.
Gary McCool, VP and investment banking specialist at Selby Jennings, says banks are skewing compensation towards top performers (again): top performers across the market are up 10%. Most are up 5% to 8%.
Some of the highest paid staff aren't in equities sales and trading but equities underwriting, says Carol Hartman, global financial services practice leader at DHR International. Here, she says bonuses are up anything from 10% to 20% - which is unsurprising given that the likes of Citi and Morgan Stanley both achieved revenue increases of close to 70% in ECM last year.
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