Wall Street pay guru forecasts a disappointing year for bonuses

Barely has the dust settled on 2024 bonuses than Johnson Associates, the Wall Street compensation consultancy run by venerable pay guru Alan Johnson, has issued a "fearless" forecast for 2025. At this stage, it is not looking great.

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From the current vantage point, Johnson and his colleagues think this could be a "down" year for Wall Street pay. They also think it could be a year of "layoffs." Morgan Stanley, Goldman Sachs and Bank of America are already making the latter true. 

The issue is "dysfunctional and chaotic Trump policies." And, "over extended markets and consumers." And, "a decline in business confidence." Johnson Associates say the deal pipeline risks being delayed and disappointing. Banks risk sinking into a "cultural malaise" born of the return to work, threats from AI and the waning of righteousness of ESG and DEI issues.

It's still early days. Things may change. Johnson Associates says last year's bonuses weren't so bad and were up 5% to 25% in banks (with equities traders at the upper end) and 5% to 15% in hedge funds. 

However, Johnson Associates say 2024 bonuses were skewed to senior staff, creating "misaligned hope and expectations." To make matters worse, they say that flat headcounts are creating "narrowing career paths." The implication is that it's not easy being a junior or mid-ranking bank employee now. Just ask vice presidents (VPs) at Goldman Sachs.  

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Photo by Nadir sYzYgY on Unsplash