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Bond Trading Seen as Bonus Bright Spot While Others Disappoint

Along with the bonus disappointments, Wall Street should also brace for job cuts of as much as 10%.

(Bloomberg) -- Bond traders’ bonuses could surge as much as 30% this year in an otherwise bleak year for Wall Street pay, according to a new forecast.

Most businesses will face a drop of at least 10%, compensation consultant Johnson Associates said Monday. That’s an improvement from the 40% tumble the firm projected in March.

Notable exceptions are businesses that benefited from a dash for cash spurred by the pandemic, resulting in record debt sales and a rebound in equities. Equity traders and stock and bond underwriters could be in for a bonus bump of 15% to 20%, Johnson Associates said.

“You’ll hear about some multimillion-dollar trader that got some multimillion-dollar increase in pay while you got less pay,” Alan Johnson, president and founder of Johnson Associates, said in an interview. “You’re not going to be able to make everybody happy and, unfortunately, this year you’re going to make many people unhappy. There are limited funds in a terrible environment.”

Along with the bonus disappointments, Wall Street should also brace for job cuts of as much as 10%, Johnson said.

“They’re figuring out they don’t need as many people as they did even in February,” he said. “The pandemic makes this so much worse from a personal, societal standpoint. So there’s a hesitancy to do this quickly.” He expects the cuts to come in the fourth quarter and the start of 2021.

Here are the firm’s bonus expectations for each business:

biz2019change.png

To contact the reporter on this story:
Sonali Basak in New York at [email protected]

To contact the editors responsible for this story:
Michael J. Moore at [email protected]
Steve Dickson, Daniel Taub

 

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