Wall Street Bonuses Set to Soar in 2024: Here's What You Need to Know

Wall Street Bonuses Set to Soar in 2024: Here's What You Need to Know

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  • Wall Street bonuses are poised to climb for the first time in three years, with debt underwriters leading the pack with bumps of up to 35%, while stock traders and underwriters can expect increases of 15% to 25%. The rosier outlook comes amid a rallying stock market and vibrant corporate bond market, though merger bankers will see more modest gains as firms look to correct previous years' subsidized pay levels. (WSJ )
  • Gold prices experienced their worst weekly decline in over three years, dropping 7% to $2,561 per troy ounce in November 2024, as Trump's election victory and a strengthening dollar reversed the metal's previous rally, though analysts suggest the underlying bullish trends remain intact. (FT )
  • Banks are capitalizing on private equity firms' increasing use of controversial "net asset value" loans - which allow PE firms to borrow against their portfolios rather than sell assets in a challenging M&A market - despite concerns about systemic financial risks. (Bloomberg )
  • The growing private credit market has unexpectedly driven down borrowing costs in other high-yield sectors while potentially compromising the accuracy of traditional credit risk indicators, suggests a veteran professor of junk and distressed debt markets. (Bloomberg )

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Wall Street Bonuses Set to Soar in 2024: Here’s What You Need to Know

The financial services industry is experiencing its most significant?compensation ?rebound since the record-breaking year of 2021. According to?Johnson Associates ?latest report, financial services professionals across nearly all sectors can expect higher year-end?bonuses , marking a decisive shift from the downward trend of recent years.

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Investment Banking Bonus Schedules: Top Banks’ Payout Dates

Bonus announcement and payment schedules vary across banks. Here’s a snapshot of possible schedules for various investment banks:

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The investment banking sector is showing robust signs of recovery, with Johnson Associates projecting the first significant compensation increase since 2021's record-breaking year. The most notable surge in recruitment has emerged in the aftermath of the November election, marking the strongest hiring activity in 18 months. Bulge bracket institutions have aggressively re-entered the hiring market, while elite boutiques maintain their selective, opportunistic approach to talent acquisition.

The breadth of hiring activity is particularly noteworthy, with multiple new mandates emerging across healthcare, technology, consumer, energy, financial institutions (FIG), and restructuring sectors. Banks are demonstrating urgency in their recruitment efforts, extending offers swiftly while simultaneously making strong counteroffers to retain their top talent. The majority of high-quality professionals affected by recent reductions in force have successfully secured new positions. Although start dates are typically being scheduled for post-bonus season, this hasn't dampened the pace of hiring activity. In terms of immigration policy, banks are beginning to reassess their stance on H1B visas, though STEM OPT candidates continue to face significant challenges in securing positions.

There has been notable mobility within the industry, particularly for exceptional performers at less prestigious institutions. These successful transitions have been limited to candidates demonstrating consistent excellence, including multiple promotions within the same firm and substantial deal closure experience. Firms maintain stringent preferences for candidates with stable career trajectories, actively avoiding those with complicated employment histories or frequent job changes. This emphasis on stability and proven performance reflects a more measured approach to talent acquisition compared to previous hiring cycles.

While the current market shows clear momentum, banks have not yet returned to offering guaranteed compensation packages. However, such incentives could potentially resurface in 2025 if the robust market conditions persist. It's important to contextualize these positive indicators: while the recovery is significant, current conditions have not yet matched the extraordinary levels witnessed in 2021. The overall landscape suggests a more strategic and sustainable approach to growth, with firms prioritizing proven talent and stable career histories over aggressive expansion.

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