Executives at traditional asset management firms can expect to see their 2019 year-end bonuses either remain flat or decline by 5% from the previous year, according to a report from compensation consultant Johnson Associates.
Johnson Associates' third-quarter report added that professionals within the hedge fund and private equity industries, meanwhile, are projected to see an increase as much as 5% in their year-end payouts.
"All signs are pointing to an overall disappointing and lackluster year on Wall Street," said Alan Johnson, managing director of Johnson Associates, in a news release. "The major investment and commercial banking firms struggled as equity trading and underwriting activity continued to fall throughout the year. Conversely, the alternatives asset sectors are performing well, with assets near record levels."
Across financial services, the professionals who are expected to take the biggest hit to their year-end 2019 bonuses are equities sales and trading professionals. Both are expected to see their year-end incentive payments decline by 10% to 15% from last year's payouts, the report said.
Investment banking underwriters and those in staff and management positions, meanwhile, can expect to see their bonus payments decline by as much as 10%, while payments to fixed-income professionals will drop by as much as 5% from last year.
"Looking ahead, we expect 2020 to be particularly challenging as myriad issues persist including revenue pressure and ongoing geopolitical uncertainty," Mr. Johnson said. "Within financial services broadly, there exists a real tension between business costs and the drive for high-end talent as market fundamentals and dynamics evolve."
Mr. Johnson added that he expects "selective layoffs and less hiring to continue as firms buckle down on expense management," which will contribute to "a downward impact on compensation in 2020."
