Wall Street professionals can expect higher year-end incentive payouts this year compared to last, according to a report by New York-based compensation consulting firm Johnson Associates, Inc.
Overall year-end incentives, which include cash bonuses and equity awards, will increase five to 10 percent this year, but those figures vary by firm.
This is the second year in a row that industry professionals will receive larger year-end awards. Fixed income traders, however, can expect to see a drop in their payments from last year, the firm said.
Alan Johnson, managing director of Johnson Associates, said in a statement that ongoing cost-cutting initiatives across the financial services industry, combined with continued uncertainty and an uneven economic recovery are keeping incentives in check, but, the fourth quarter results could change these year-end bonuses positively or negatively.
Asset managers, high net worth professionals and underwriting investment bankers will receive the largest payouts, an anticipated jump of 10 to 15 percent over last year’s bonuses. Fixed income traders will likely see a decline of between 5 percent and 15 percent because they received the largest increases last year, the report found.
Investment bankers on the advisory side also will see smaller payments, and incentive payouts for hedge funds, equities, private equity and prime brokerage will increase modestly—anywhere between 5 percent and 15 percent compared to 2012.
Looking ahead to 2014, Johnson said he expects continued improvement in many segments of the financial services industry. European firms continue to plan for underlying uncertainty in the industry.
“Within banking, incentives may increase 15 percent or higher next year. After successive years of strong growth, asset management year-over-year increases may taper somewhat to about 10 percent,” Johnson said.