Money management professionals can expect to see a 20% to 25% decrease in year-end bonus payouts from last year, said projections from compensation consultant Johnson Associates.
Johnson Associates' quarterly analysis projects broad and substantial decreases in incentive compensation across financial services. Incentive compensation for asset management is expected to be down broadly, with the coronavirus pandemic magnifying the ongoing challenges of many firms. Fees are down and revenues are declining as a result of the pandemic.
Plus, many asset management firms are currently committing to not laying off staff but are continually reassessing that decision as the year continues.
Incentive payouts for professionals in large private equity firms are expected to be 5% to 10% lower than last year, while bonuses for professionals in small private equity firms are estimated to be down 15%. Professionals in the hedge fund industry can expect a decrease of about 15% to 20% from last year's bonus.
The projections are based on first-quarter trends in the financial services industry.