Traditional equity and fixed-income asset management professionals should see their year-end incentive payouts this year hold fairly steady from the year before, making them winners in a financial sector where others are facing ever-sharper declines, according to compensation consulting boutique Johnson Associates.
Amid a stumbling economic recovery and a growing public focus on Wall Street pay, Johnson Associates scaled back its forecasts for year-end compensation, which includes cash bonuses and equity awards.
Fixed-income professionals at asset management firms are looking to be anywhere from breaking even to 5% up from the year before, a slight setback from the prior quarter's estimate of zero to 10% up.
Equities professionals at asset management firms, meanwhile, are now looking at anything from a 5% decline to breaking even, down from an August forecast of break even to a 5% gain.
Hedge fund managers are faring a little worse, with anticipated year-end incentives down between 5% and 10% from the year before, after the prior quarter's forecast of anything from breaking even to a 5% gain.
Likewise, private equity managers are now looking at being down 5% to break even, off from August's forecast of breaking even to up 5%.
In other parts of Wall Street, Johnson Associates forecasts plunges in year-end incentive pay for fixed-income traders at investment or commercial banks of between 35% and 45%, with equity traders looking at declines of 20% to 30%.
In a news release Tuesday, Alan Johnson, managing director of Johnson Associates, said: “The lack of economic recovery, combined with ongoing uncertainty in the world markets, and global and regional regulation are driving most financial services firms to significantly reduce the size of their bonus pools. As a result, most but not all professionals will receive smaller payouts this year.”