Wall Street’s top earners are about to see the largest bonus payouts in history, with some trading desks set for pay hikes of 20% to 30%, according to a new report from pay consultant Johnson Associates released Tuesday.
The firm found that all bonus-eligible employees at 15 major US and foreign banks will see their bonus pools rise roughly 15% on average this year. New York’s total bonus pool already hit a record $49.2 billion last year, according to state Comptroller Thomas DiNapoli, who expects it to grow even larger.
Alan Johnson, managing director of Johnson Associates, said last year was good, but “this [year] is even better.”
“The whales in the ocean, of course, are the big banks for New York financials, and they did extremely well.”
His firm has labeled 2026 the “year of the bank,” pointing to record results in equity trading and underwriting. Johnson described the industry as “very healthy, maybe euphoric.”
Stock traders and bankers handling new share sales are positioned for the biggest gains, with hikes of 20% to 30%. M&A advisers are expected to see bonuses rise 15% to 20%; bank bosses, 10% to 20%; equities managers, 10% to 15%; and fixed-income traders, 7.5% to 12.5%.
Johnson said the payouts track directly with performance. “If your business, the firm, is very successful, you’ll get paid really well,” he said. “And if the firm and the business you’re attached to doesn’t do well, you won’t.”
Banks Pay Up to Keep Talent — and Cut Elsewhere
Banks are opening their wallets in part to stop top performers from jumping ship to private equity or tech. “Critical or excellent people are worth more, and you don’t need as many of them,” Johnson said. “But average people are worth less and replaceable.”
He added that competition is coming from multiple directions. “As always, you’ve got competition from other banks. You’ve got competition from private markets,” Johnson said. “You certainly have competition from AI and others.”
That same technology is already reshaping headcount. AI is increasingly taking over tasks once assigned to junior analysts, including building pitch books and running compliance checks, which allows firms to shrink mid-level payrolls while keeping bonus pools flush for top performers.
“I think certainly, as you look at trading, for example, you’re going to have fewer associates, analysts, vice presidents. I think that’s happening. I think technology is replacing people,” Johnson said.
Goldman Sachs offers a clear example: its pay bill surged 17% to $16.6 billion in the first nine months of the year even as its overall staff shrank by 2%. Goldman President and COO John Waldron told CNBC that AI lets the bank grow without large-scale hiring. “We can actually scale the firm, be more valuable to our clients,” he said. “I think a lot of enterprises are starting to see that.”
Banks are also using titles and cash to fend off private equity firms trying to poach dealmakers with lucrative profit-sharing arrangements. Goldman elevated 109 employees to its elite partner ranks last week, its largest such class since 2010, including a record 13 engineers — a sign that one of the fiercest bidding wars on the Street is now for technical talent. Johnson said private equity remains a threat to banking talent but has been “supplemented by the pull of AI firms.”
A Different Story Than City Hall Predicted
Johnson’s upbeat forecast stands in sharp contrast to the gloomier outlook City Hall offered earlier this year. Mayor Zohran Mamdani’s May budget projected Wall Street profits would hit $45 billion in 2026, down from a record $65 billion the year before. Instead, the Street blew past that $45 billion mark in just six months, and DiNapoli says profits could top $90 billion if the current pace continues.
Still, Johnson cautioned the good times may not last. His report expects “2026 to mark a peak against a potentially weaker 2027,” citing geopolitical turmoil, rising inflation and the risk of an AI “bubble.”
“You rarely see everything being good at the same time.”
