Wall Street’s whales are set to earn the fattest bonus haul in history, with the hottest trading desks expected to rake in massive 20% to 30% spikes in performance-related pay, according to a new report.
It’s not just the busiest desks that are poised to receive juicy paychecks. All the bonus-eligible employees at 15 major US and foreign banks will see bonus pools jump about 15% on average, according to a closely watched report released Tuesday by pay consultant Johnson Associates.
New York’s total bonus pool hit a record $49.2 billion last year, according to Comptroller Thomas DiNapoli, who also expects it to climb even higher.
Last year was good, “and this [year] is even better,” Alan Johnson, the firm’s managing director, told The Post.
“The whales in the ocean, of course, are the big banks for New York financials, and they did extremely well,” he added.
His firm dubbed 2026 the “year of the bank,” fueled by “record results in equity trading and underwriting.”
Johnson called the industry “very healthy, maybe euphoric.”
The biggest winners are stock traders and the bankers selling new shares, data compiled by Johnson Associates shows. They are expected to see whopping hikes of 20% to 30%
The survey also indicates that M&A advisers are in line for a 15% to 20% bonus boost; bank bosses, 10% to 20%; equities managers, 10% to 15%; and fixed-income traders, 7.5% to 12.5%.
The firm tracks bonus changes by percentages, leaving the raw multibillion-dollar tallies to government bean counters.
“If your business, the firm, is very successful, you’ll get paid really well,” Johnson said. “And if the firm and the business you’re attached to doesn’t do well, you won’t.”
He explained that many Wall Street titans are deciding to pay out bonuses to prevent top talent leaving for roles in private equity or the booming tech sector.
“Critical or excellent people are worth more, and you don’t need as many of them,” Johnson said. “But average people are worth less and replaceable.
“As always, you’ve got competition from other banks. You’ve got competition from private markets, he added. “You certainly have competition from AI and others.”
AI has also been driving job cuts on Wall Street, according to reports, with bots increasingly handling the heavy lifting that once required armies of young analysts — from building pitch books to checking strict compliance rules. That lets firms slash mid-level payrolls and hoard the cash.
“I think certainly, as you look at trading, for example, you’re going to have fewer associates, analysts, vice presidents. I think that’s happening. I think technology is replacing people,” Johnson said.
AI appears to be impacting Goldman Sachs’ payroll — the bank’s pay bill surged 17% to $16.6 billion in the first nine months of the year, even as its overall staff shrank by 2%.
In a recent CNBC interview, Goldman President and COO John Waldron noted that AI allows the bank to grow its output without a massive hiring spree.
“We can actually scale the firm, be more valuable to our clients,” he said. “I think a lot of enterprises are starting to see that”.
Wall Street titans are also throwing exclusive titles and cold hard cash at their top dealmakers to fend off private equity poachers.
The buyout barons remain a constant threat, luring away prime banking talent with the promise of highly lucrative profit-sharing deals.
Goldman appears to have deployed this defensive playbook. The banking giant elevated a massive 109 employees to its elite partner ranks last week, the largest class since 2010.
The Wall Street giant also named a record 13 engineers as partners, proving that one of the hottest bidding wars on the Street is now for the nerds.
Johnson said private equity is still a threat to banking talent but has been “supplemented by the pull of AI firms.”
His bullish forecast for New York’s financial sector marked a stark contrast to the gloomy outlook earlier this year from City Hall, which predicted a bust.
Mayor Zohran Mamdani’s May budget had Wall Street profits hitting $45 billion this year, down from a record $65 billion in total profits last year.
The Street blew past the $45 billion mark in just six months, with DiNapoli saying profits could top $90 billion if the pace holds.
Still, top compensation expert Johnson warned Wall Street bankers that the champagne may run dry by next New Year’s Eve.
His study expects “2026 to mark a peak against a potentially weaker 2027,” citing geopolitical turmoil, rising inflation and a possible AI “bubble” looming over the market.
“You rarely see everything being good at the same time,” Johnson added.