Wall Street workers are starting to suffer from a declining bonus pool that could fall by about 20% this year, according to data from compensation consultant Johnson Associates Inc.
The sharpest drop is likely to be in fixed-income sales and trading, as well as investment-bank underwriting, according to Bloomberg. Those workers are expected to see a bonus pool decline of 15% to 20% from a year earlier, Johnson Associates said Tuesday in a report.
Declines of 10% to 15% could also be experienced in the investment-banking advisory services and management positions at banks.
Bonus pool declines are the least of many bankers worries. Goldman Sachs, Bank of America, and many other Wall Street firms have begun to cut costs across business units as they attempt to deal with slumps in trading and dealmaking.
Bloomberg also reports that hedge funds are suffering as more firms were “liquidated in 2015 than were opened for the first time in seven years.”
Hedge funds are expected to cut bonuses by upwards of 15% and other asset managers could see their bonuses decline by 5% to 10%, Johnson said.
High-net-worth managers and private equity firms are also expected to reduce bonuses by 5%.
It wasn’t a good time to be collecting a bonus in 2014 with the average bonus falling by 9% to $146,200. Still not a bad take home on top of typical banking salaries. However, it was the largest decline since 2011.
The bonus pool last year declined by 6% to $25 billion at a time when 4,500 jobs were added in New York City.