Wall Street bankers may be disappointed in 2022 as big financial firms are expected to cut bonuses by as much as 40 percent due to a fall in bank profits, according to predictions by Alan Johnson of compensation consulting firm Johnson Associates.
In a May 5 report (pdf), Johnson explained that investment and commercial banking profits were down in 2022 compared to 2021, along with asset management incentives and private equity incentives. Hedge funds also remained flat.
“For the first time in decades, inflation has significant impact on real compensation outcomes,” the report stated.
Investment banking underwriters are expected to see the biggest hit, with bonuses declining by 35 to 40 percent. Underwriter bonuses in 2021 had surged by 35 percent amid an increase in mergers and acquisitions, so the decline will take bonuses back to 2020 levels.
…