Wall Street to get bonus bump despite market tumult

By MarketsFOXBusiness

The market volatility not signaling a US recession?

FS Investments Chief U.S. Economist Lara Rhame on the outlook for the markets and the U.S. economy.

Workers on Wall Street have reason to rejoice this holiday season, as year-end bonuses are expected to rise even as the market remains volatile.

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Year-end incentives – including bonuses and equity awards – for most professionals across the industry are expected to increase by 5 percent to 10 percent when compared with 2017, according to a report from consulting firm Johnson Associates. This would be the second straight year of increases.

Professionals in sales and trading are set to receive the highest bonuses, between 15 percent and 20 percent, followed by workers in private equity – who will receive a bump of 5 percent to 10 percent. Investment banking underwriters and those in firm management and staff positions could also receive incentives in the 5 percent to 10 percent range.

Not as lucky? Investment banking advisers, for whom it’s estimated bonuses will either not rise at all, or potentially shrink by as much as 5 percent when compared with last year.

Payouts for the rest of Wall Street workers are likely to be around 5 percent as firms record strong performances in 2018.

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The outlook for 2019 is a little more downcast, however, with Johnson Associates forecasting firms will be trimming headcounts and potentially lowering pay as business challenges persist.

Meanwhile, policy uncertainty and growth concerns have triggered recent fits of tumult in the equity market. Stocks whipsawed this week, surging on Wednesday following a Christmas Eve plunge. The U.S. market is on track for its worst December since the 1930s.