Wall Street bankers are on course for their biggest bonus increases in years, with equity traders and dealmakers expected to lead the pay surge as record stock markets and a revival in mergers and acquisitions boost revenues across the financial sector.
According to compensation consultancy Johnson Associates, bonuses for equity traders and equity capital markets bankers are projected to rise by between 20% and 30% this year, the largest increase across Wall Street. Bankers advising on mergers and acquisitions are expected to receive payouts that are 15% to 20% higher than in 2025.
The upbeat outlook follows a strong earnings season for the largest US banks, driven by robust trading volumes, a resurgence in corporate dealmaking and increased underwriting activity.
“Most of the excitement is coming from the equity side, with stock markets at record highs and volatility increasing trading volume,” said Alan Johnson, founder of Johnson Associates.
Investment and commercial bankers are expected to see bonus growth of at least 10% to 15%, while fixed-income traders could receive increases of between 7.5% and 12.5%. Compensation for bankers underwriting bonds and loans is forecast to rise by between 5% and 10%.
The recovery in dealmaking has been one of the biggest drivers of higher compensation. Years of subdued mergers and acquisitions activity have given way to a growing pipeline of transactions, generating substantial fees for Wall Street firms.
Among the year’s biggest mandates was SpaceX’s blockbuster initial public offering (IPO), which reportedly created a fee pool of around USD 500 million. Goldman Sachs and Morgan Stanley, which led the deal, are estimated to have earned roughly USD 100 million each, while Bank of America, Citigroup and JPMorgan collected about USD 75 million apiece.
Johnson said the resilience of the US economy had surprised many bankers, despite geopolitical tensions in the Middle East, inflationary pressures and shifting expectations around interest rates.
“The surprise really is how strong the economy has been. We have marched on regardless of things that would have slowed or brought things to a halt,” he said.
Not every corner of the financial industry is benefiting equally. Bonuses in private credit are expected to remain flat or decline by as much as 10% after fraud scandals triggered large investor withdrawals, while executives at large private-equity firms may receive modest increases of between 2.5% and 7.5%.
Artificial intelligence (AI) is also reshaping the industry. Banks are increasingly using AI to streamline operations and reduce headcount, meaning that while compensation is expected to rise, hiring is likely to remain subdued through the rest of 2026.