Big bonuses are on the table for 2026, but not for everyone
It’s still early in the year to talk about 2026 banking bonuses – 2025’s were paid out only recently – but with Q1 done, the silhouette of the beast is becoming visible. It’s pretty, but not exactly well-proportioned.
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Wall Street compensation consultancy Johnson Associates suggests that bonuses for 2026 will not be distributed very equally. Based on private interviews and publicly available data, the firm predicts the biggest winners this year to probably be in investment banking; the biggest losers will likely be in private credit.
Within investment banks, advisory (M&A) and equities (both capital markets and sales & trading) professionals are forecast to enjoy the largest bonus increases, anywhere from 10% up to over 20% compared to what was paid out earlier this year (for performance in 2025).
Aside from the higher revenues, Johnson Associates also says that lower overall headcount within banks is pushing bonuses up “sharply higher”. Fewer slices from a bigger pie.
The problems in private credit are forecast to reduce the average bonus in the sector by between 2.5% and 7.5%. Although the Financial Stability Board noted earlier this month that after the failure of Tricolor and First Brands, losses “were digested by markets without any major strains,” fundamental issues remain. Private credit suffers, “a lack of transparency and hidden leverage… leaving lenders with insufficient or poor information about their clients,” observed the FSB.
Alan Johnson says private credit professionals need to adjust expectations to the new reality. "It’s a space that has a lot expectations attached to it. Many of these professionals will be disappointed – they thought private credit would go to the sky," he says.
The big wildcard in terms of bonuses, however, is the hedge fund industry. Here, there is huge variety in bonus scope, depending on product: Johnson Associates notes that macro and commodities professionals are doing great (duh), while event-driven traders are doing poorly. These performances will reflect in end of year bonus. That and how much your PM likes you.
The kudzu vine that is Artificial Intelligence is starting to crawl over your compensation, too. "Having client contacts is becoming more important in the age of AI," Johnson Associates says. "If you can get close to clients and customers, the better off you will be. If you are in a support or middle office role, you need to be more careful."
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