Wall Street Bonus Momentum: Here And There

As markets remain volatile and deal-flow returns, bonus pools on the US side are gearing up for a second strong year. According to compensation consultant Johnson Associates Inc., banks are projecting year-end incentive-pay rises across investment banking, trading and wealth-management functions, with equity traders potentially seeing jumps up to 25 %. In fixed income, the increase is more modest (5-15 %) and wealth management up to about 10-12 %.

What’s driving this:

• A rebound in trading and underwriting business after a slower period.
• Banks benefitting from renewed activity in M&A, equities and private-credit markets.
• Market volatility creating opportunities—and higher pay for risk-takers.

At the same time, global survey data from the careers platform eFinancialCareers shows that financial-services professionals around the world are expecting significantly higher bonus uplifts. For instance:

• A January 2025 study found professionals globally expected a roughly 50 % average increase in their upcoming bonus round compared with prior year. Onrec+2Yahoo Finance+2
• Regionally, UK & Ireland respondents predicted a ~43 % increase, Europe ~40 % and North America ~38 %. Onrec
• In more concrete terms, the UK recorded an average bonus payout of US$148,961 in its financial-services sector for the year, up ~26 % year-on-year—and ahead of Europe (~US$108,522) and North America (~US$145,817). Onrec+1

All in all: strong tailwinds for US front-office bonus pools, and rising optimism globally.

What This Means for Europe

“The US is clearly in second gear when it comes to bonus expansion,” says Alex Croft, founder at Croft & Co. “In Europe—especially front-office trading and investment banking—the mood is positive, but more cautious.”

Alex highlights three key observations for the European scene:

1. Regulatory and structural constraints linger.
   Even as the UK-based market has seen higher bonus growth (in part because of removal of the EU bonus-cap for senior bankers), many continental European banks remain conservative. The data bear this out: Europe’s average bonus payout (~US$108k) trails the UK and North America. Onrec+1
2. Uneven performance, uneven rewards.
   Within Europe, the front-office winners—such as equity-trading desks, structured-credit teams, and M&A advisory units—are seeing the most uplift, whereas more traditional areas (e.g., legacy fixed-income sales) are still under pressure. Alex notes that “the uplift is very much selective: don’t expect broad-brush double-digit increases everywhere.”
3. Retention and long-term incentive design matter.
   Given the slower rebound in some European markets, many banks are focusing less on headline cash bonuses and more on long-term deferred incentives, retention mechanisms and alignment of pay to sustainable performance. Alex remarks: “In Europe, the emphasis has shifted from one-off payouts to how you keep talent engaged for the next cycle.”

Takeaways for Front-Office Professionals

• US bonus pools are accelerating, particularly for equity-traders and dealmakers in a revived M&A / underwriting environment.
• Europe is improving, but with caveats. The UK may lead in growth, but across continental Europe the progress is patchy and tied to specific segments.
• Focus your positioning. If you’re in a high-volatility, high-return desk (e.g., equities, private credit, structured products) you’re well-placed for the upside; if you’re in slower-growth functions, expect modest gains.
• Think long term. For many firms (especially in Europe), retention and deferred schemes will become increasingly integral—bonus timing, clawbacks and vesting periods may all be material.
• Keep an eye on macro and regulatory risks. The upbeat bonus environment may be sensitive to economic slowdowns, regulation, and risk events—so gains this year may not be guaranteed next.

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