Wall Street is in for a sweet payday this year, but AI could mean leaner teams ahead
Wall Street bonus season is approaching — they’ll hit in the New Year.
The consultancy Johnson Associates projects pay gains across high finance.
Traders, advisors, and wealth managers are set to lead the bonus scoreboard, the report predicts.
After a year defined by volatility and political uncertainty, Wall Street is heading into the holiday season on a high note — but it may be dampened by the existential threat of AI shaking up their jobs.
Year-end bonuses are projected to rise across nearly every business line, according to a new report released Wednesday by compensation consultancy Johnson Associates, with traders being the big winners — who could see up to 25% increases — followed by mergers advisors and wealth managers. Only a handful of sectors, like real estate and venture capital, were projected to remain flat.
“It’s a remarkable, not only recovery, but a broad-based recovery across classes — the sexy and the mundane have all kind of moved up together,” said Alan Johnson, the firm’s founder. “Which is unusual.”
Yet the same report delivers a warning that automation is about to reshape the financial workforce. Head count could fall 10% to 20% in the next three to five years as banks and asset managers accelerate the adoption of artificial intelligence to streamline operations and trim costs, it warns.
“If you have skills, you may do better,” Johnson told Business Insider. “There’ll be fewer of you — but you’ll be cherished more.”
Johnson Associates’ head count projections.Johnson Associates
That said, David Solomon, the chief executive of Goldman Sachs, recently said at a conference that he thought the firm would have more employees — not fewer — in the coming decade, precisely because of AI.
For Wall Street, last year’s bonus pool was big. A survey from the recruiting firm Prospect Rock Partners found that 2024 bonuses at Wall Street investment banks ranged from nearly $50,000 for early-career bankers to upward of $850,000 for managing directors; group heads, on average, took home $1.7 million in incentive compensation. Overall, the New York State Comptroller found that bonuses for financial services reached nearly $48 billion total.
The industry’s gains shine a light on the widening chasm between Wall Street and Main Street, Johnson said, agreeing with lawmakers who say “if you make under $200,000 or $250,000 in America, you may be hurting. If you make under $100,000, you may be hungry. I think that’s well said.” He added: “People who aren’t as well off enough continue not to get ahead.”
Here’s a look at a few of the predictions from the report and what banks’ incentive-comp pools may hold for Wall Street denizens.
While volatility made 2025 unpredictable at times, it powered traders to windfall results. Johnson Associates projects bonuses for equity sales and trading professionals will climb between 15% and 25% this year, making them the biggest winners on Wall Street. Fixed income sales and trading, as well as debt underwriting, are both expected to increase by 5% to 15%, according to the report.
“The banks are doing well with the volatility in the markets, the advisory business, the M&A business are finally doing well,” he said, predicting tailwinds into 2026.
President Donald Trump’s tariffs jolted global markets through the second quarter, sparking a surge in trading volumes that made traders the standout stars on bank CEOs’ earnings calls. Morgan Stanley led its rival investment banks in equity trading revenue this past quarter, generating more than $4.1 billion — $1 billion more than the same quarter last year.
Johnson Associates’ quarterly compensation analysis.Johnson Associates
Other bonus projections by the firm included a 7% to 12% increase for traditional asset management, 2.5% to 10% or more for hedge funds, and 2.5% to 5% for insurance, all compared with 2024 levels.
Incentive compensation for the advisory bankers who handle mergers and acquisitions is expected to rise 10% to 15% this year — the strongest since 2021 — as dealmaking activity rebounded sharply this fall.
“We had a clogging in ’24 and the first two quarters of ’25. We captured some of that in the second half of this year, but a lot will flow into next year,” Johnson said. “Banks get paid when the deals close, not when they’re announced.”
Advisory revenues returned this autumn, reviving hopes inside major firms of a new “golden age” for investment banking. Strategic corporate deals have returned, Johnson said, underscoring CEO confidence, while private-equity sponsors remain wary because they’re not hitting pricing levels that would justify a sale.
“Sponsor activity continues to be spotty,” Johnson said — perhaps why private equity bonuses at mid- and small-cap firms are expected to be flat; larger firms may enjoy bonus increases of 5%. Those who work in secondaries, the part of the business that extends funds’ life, may enjoy bonuses upward of 10%.
“They have an enormous amount of dry powder. Prices are elevated. The real problem for a lot of the illiquid investments is simply that they didn’t do a great job of underwriting deals in ’21 or ’22,” he added, “so part of the reason we don’t have more exits is that they can’t get the prices they’re looking for.”
As more executives and founders take their companies to market, the wave of capital-generating events is minting new millionaires, boosting bonuses for private wealth advisors. The flood of money in the markets has fed an “advisor talent war,” the report notes.
Wealth management is a highly desirable area for banks to enter, Johnson said, citing the rise in high-net-worth and ultra-high-net-worth clients who need personalized financial advice. For banks, this is something of a goldmine because the business doesn’t tie up much capital, generates recurring fees, and can conceivably hang onto clients for decades to come.
Plus, he suggested that this area of finance may be buttressed from AI’s job-replacing effects, at least for the foreseeable future. While artificial intelligence can enhance portfolio management solutions, he said, clients continue to want a human advisor handling their savings — particularly older generations who hold much of the wealth. Wealth management pay is expected to climb 8% to 10%, and family-office incentives by 5% to 8%, the report forecasted.
Asked what surprised him about this year’s results, Johnson said it was that 2025 is ending on a high note. “Earlier in the year, we said there’s only a 30% chance that things can turn out really well,” he said. “Clearly, we’re in the better part of the 30%.”
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