Wall Street bonus update: Who's winning in banking and private equity

The M&A recovery may look strong on paper, but that doesn’t guarantee generous bonuses for dealmakers.

A new compensation report from Johnson Associates shows traders riding a wave of volatility to bigger year-end bonuses while many private equity professionals and M&A bankers brace for another year of stagnant or shrinking pay.

Equities traders are on track to notch bonus gains of 20% to 30% this year, while fixed income desks could see increases of 10% to 20%, the compensation consultancy’s report released Tuesday said. Debt underwriting is benefiting from a spike in refinancing demand, with payouts forecast to rise 5% to 15%.

However, bonuses for M&A advisors are forecasted to be flat to up about 5%. That’s a long way off from what dealmakers expected coming into 2025, but perhaps better than they might have believed in April as tariff fears mounted.

Last year, Wall Street bonuses overall surged by 34% to $47.5 billion, the highest total on record, according to a report from Thomas DiNapoli, the New York comptroller. This year, M&A and IPOs have been muted as companies waited to assess the impact of President Donald Trump’s tariffs and other policy changes.

“It was dead in Q1” for mergers and acquisitions, said Chris Connors, a principal at Johnson Associates, adding, “but there was a recovery in the second quarter.”

Among alternatives, private credit is expected to be the breakout winner.

Bonuses for private credit professionals are forecast to climb between 2.5% and 7.5% as investor demand surges and firms jostle to hire top talent. Johnson’s report, however, warned that private credit’s hiring spree is vulnerable to risks.

“Private credit has certainly reached bubble territory in terms of fundraising, investor demand, the talent market,” Connors said. “It hasn’t quite yet popped, but I do think cracks are showing,” he added.

Bonus increases will be lower in traditional private equity. Large-cap funds are expected to hold pay steady, but mid- and small-cap firms could slash bonuses by up to 5%, according to the report, which blamed “fundraising difficulties” and questions around headcount levels.

The Johnson Associates report also flagged broader risks that could further impact bonuses.

“These are real concerns,” Connors said of remaining geopolitical uncertainty and tariffs. He added that financial services firms, for the most part, “have been incredibly resilient in the face of all that.”