Year-End Showdown: Wall Street Perks and Promotions Unveiled
As the year comes to a close, banks are gearing up to set new goals for the future. But before that, they have to tackle the tough task of evaluating this year’s performance, including the hotly debated topic of promotions and bonuses. It’s a complex and high-stakes conversation that’s anything but simple.
The good news: After a lackluster couple of years due to high interest rates affecting dealmaking and fees for investment banks and money managers, activity levels are on the rise. According to pay consultancy Johnson Associates, Wall Street bonuses are expected to increase by up to 35% this year. This surge is being driven by a rebound in corporate deals, stock sales, and debt transactions in 2024. Investment bankers, particularly those working on debt transactions, are set to benefit the most, with bonuses expected to go up by 25% to 35%. This is especially promising for Goldman Sachs’ investment banking division.
The outlook for M&A, dealmaking, and investment banking has also improved with Trump’s return to the political stage. During his previous administration, banks were more active in stock buybacks, which helped boost stock prices by reducing the number of outstanding shares. Additionally, Trump’s pro-deregulation stance and relaxed approach to antitrust enforcement could lead to an increase in mergers and acquisitions, providing banks with more opportunities to profit from direct deals and a higher transaction volume.
But things are not all rosy for everyone on Wall Street. Citi, for instance, is taking a different approach, opting for a more conservative strategy when it comes to year-end bonuses, raises, and promotions.
In a bold move last year, Citibank launched Project Bora Bora, a cost-cutting campaign that involved its largest-ever layoffs and an overhaul led by CEO Jane Fraser. While the project was expected to conclude by March 2024, its impact is still being felt, resulting in reductions in salary increases and employee demotions.
In conclusion, while Wall Street bonuses are expected to enjoy a significant boost this year, not all firms are following the same path. Citi’s cautious approach reflects the nuanced and varied landscape of year-end rewards and promotions in the financial sector.
