NEW YORK, Nov 10 (Reuters) - Wall Street bonuses are expected to rise for a third consecutive year in 2026, even as higher interest rates and market volatility are beginning to slow this year's record dealmaking and trading revenue, compensation consultancy Johnson Associates said.
Bankers working in equity sales, IPO underwriting and trading will receive 20% to 30% higher bonuses, the consultancy estimates. Executives advising on M&A deals will receive compensation 15% to 20% higher, and fixed-income sales and trading professionals are expected to see increases of 7.5% to 12.5%.
Alan Johnson, founder and managing director of Johnson Associates, said 2026 is expected to end as "the year of the banks" with the highest compensation for their employees.
Worldwide investment banking fees rose to $99.4 billion in the first nine months of the year, up 9% from the same period a year ago and the highest since records were set in 2021, according to LSEG data.
"But this may be the peak year, as 2027 profits may be affected by higher interest rates, geopolitical turmoil and market volatility," he added. The recent rout in technology stocks is a reminder that equity valuations are historically very high, Johnson said.
Bonuses for insurance and asset management executives will be flat to slightly higher compared to last year. The only area where incentives may decline is private credit, which has been dealing with increased redemption requests and some losses due to bankruptcies.
Reporting by Tatiana Bautzer; Editing by Stephen Gandel and Muralikumar Anantharaman
