That was the conclusion of an annual compensation analysis released by Johnson Associates, a New York-based compensation consulting firm.
The analysis shows that year-end incentives, which include cash bonuses and equity awards, are projected to increase by approximately 5% across the financial services industry, although some segments of the industry will see decreases this year. Asset management, high net worth and alternative investments professionals are expected to receive the largest increases – up to 15% – this year, the analysis found, according to a news release.
Meantime, fixed income and equities traders at investment and commercial banks, who last year received awards that increased by more than 40%, will be the hardest hit this year. The analysis shows their year-end incentives will decline by 20% or more.
“What started out to be a very promising year for Wall Street fizzled over the summer months,” said Alan Johnson, managing director of Johnson Associates, in the news release. “While asset management and alternative businesses improved moderately, results in other industry segments, including investment and commercial banking investments, were hampered by weak trading and reduced client activity. Most firms were forced to scale back their bonus pools from earlier in the year and as a result, year-end increases will be much more modest than originally thought.”
Looking forward, Johnson expects modest growth and hiring, according to the news release. “The larger firms are maintaining their international focus with much of the planned hiring to be outside the United States. The political and regulatory environment will continue to weigh on the sector in terms of pay magnitudes and design,” concluded Johnson
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