Wall Street bonuses: Who is set to win in banking and private equity

Wall Street banks are set to deliver a significant bonus boost in 2026, with a 39% increase from 2022 levels, according to a report by compensation consultancy Johnson Associates. This outpaces wealth management (29% rise) and hedge funds (24%), signaling a return to prominence for banks after years of private equity dominance. The report highlights strong performance in mergers and acquisitions (M&A), equity underwriting, and trading units as key drivers. Private equity firms, once the top-paying employers, are expected to see only flat or 5% bonus increases due to slower fundraising and companies staying private longer. Private credit bonuses may decline by 2.5% to 7.5%, amid redemption pressures and AI-related concerns affecting portfolio companies. Other sectors like infrastructure, venture capital, and real estate are projected to see minimal growth, ranging from flat to 5%. Investment and commercial bankers are projected to see a 10% bonus increase, with advisory and equity underwriting roles potentially rising by 10-20%. The six largest Wall Street banks reported a combined $47.3 billion in first-quarter revenue, reinforcing optimism despite global uncertainties like the Iran conflict, which Johnson Associates dismisses as a minor irritant for financial services. The average Wall Street bonus rose 6% to $246,900 in 2025, per New York State Comptroller Tom DiNapoli. However, AI advancements are disrupting junior banker career pipelines, creating uncertainty despite overall positive compensation trends. Johnson Associates notes that projections remain fragile due to geopolitical and economic risks but maintains high sentiment in the financial sector.