Wall Street Bonuses Set to Rise 20% to 30% in Equities and IPOs
Key Facts
Johnson Associates forecast that bonuses for employees in equity sales, underwriting and trading will rise 20% to 30% or more in 2026 from the previous year, reflecting strong investment banking activity. Alan Johnson, the firm’s founder and chief executive, said the year is on track to end as “the year of the banks,” with compensation at its highest levels for bank employees. The estimates also include a 15% to 20% increase in compensation for professionals advising on mergers and acquisitions. Bonuses for fixed-income sales and trading employees are expected to rise 7.5% to 12.5%, the report said. The projections come amid a strong year for fees and profits, but remain forecasts rather than final results.
Global investment banking fees reached 99.4 billion dollars in the first nine months of 2026, up 9% from the same period, according to LSEG data cited by Reuters. That was the highest level for the period since records were set in 2021. Fees reflect revenue from activities including arranging offerings and deals, and are among the indicators that help explain estimates of higher bonuses for some bank teams. Johnson Associates said large bonus increases had been recorded for a third consecutive year. Axios added that the run could peak this year, putting positive forecasts up against the possibility of a later slowdown.
Wall Street’s securities industry posted profits of 45.9 billion dollars in the first half of 2026, up 51.3% from the same period a year earlier, according to New York State Comptroller Thomas DiNapoli. DiNapoli said spending tied to artificial intelligence, merger and acquisition activity, and higher trading volumes contributed to the strong results. First-half profits had already exceeded New York City’s 45.3 billion dollar forecast for the full year. On that basis, the comptroller’s office projected an increase in the 2026 bonus pool, while the city had forecast a 20% decline. DiNapoli also said industry profits could top 90 billion dollars this year if they continue growing at the recorded pace.
Last year’s data provide a baseline for comparison: the securities industry bonus pool reached 49.2 billion dollars in 2025, up 9% from 2024, while the average bonus rose 6% to 246,900 dollars. DiNapoli attributed the growth in profits and bonuses in 2025 to strong trading, underwriting and fees charged for managing client accounts. Compensation also matters to the city’s finances: industry tax revenue accounted for 8.4% of New York’s tax revenue in fiscal 2025. DiNapoli said the office will issue its estimate of 2026 bonuses in March 2027, based on tax withholding data. That will be a later estimate for the year, after the underlying data are complete.
The estimates coincide with a recovery in the IPO market, though the available figures cover specific periods and deals. U.S. initial public offering proceeds exceeded 22.3 billion dollars through May 13, 2026, more than twice the total for the same period in 2025, according to Dealogic data cited by Reuters. In May, Cerebras raised its offering price and the number of shares after investor orders exceeded available shares by more than 20 times. The company’s filings showed revenue rose to 510 million dollars in the year ended December 31, 2025, from 290.3 million dollars the previous year. Goldman Sachs forecast that U.S. IPO proceeds would quadruple to a record 160 billion dollars in 2026, with SpaceX, OpenAI and Anthropic among the potential listings.
The impact of IPOs extends beyond underwriting fees: Morgan Stanley said its wealth management unit attracted more than 116 billion dollars in new client assets tied to IPOs in its latest reported quarter, on October 14, 2026. That highlights another channel through which institutions benefit after a listing, by managing assets for founders, employees and investors. By contrast, bonus forecasts were weaker in some private investment fields: private equity bonuses were projected to grow between zero and 7.5%. Axios forecast that private credit bonuses would be flat or fall by as much as 7.5%. Expectations therefore vary by sector activity, even as Wall Street fees and profits remain strong.
Anthropic and OpenAI offerings remain among the key upcoming listings watched by the market, alongside the banks that will win their business, Axios said. Goldman Sachs also cited the two companies among potential listings underpinning its 2026 proceeds forecast. But Johnson Associates warned that 2027 profits could come under pressure from higher interest rates, geopolitical turmoil and market volatility. The firm said the recent technology stock sell-off had highlighted elevated valuations. New York State’s official estimate of 2026 bonuses for industry employees is due in March 2027.