Market Analysis

Bonuses for Wall Street dealmakers are projected to rise by 7.4% in 2024, driven by a rebound in deal-making that is increasing fees for investment banks, according to a report released on Wednesday by New York State Comptroller Thomas DiNapoli.

This anticipated growth marks the first increase in two years, as corporations begin to recover from a period of subdued activity in deal-making. Economic resilience, a significant stock market rally, and the onset of a potential rate-cutting cycle have encouraged companies to pursue mergers, acquisitions, and sales of stocks and bonds.

Bonuses play a crucial role in overall compensation on Wall Street and have a significant impact on the economy of New York City and the state. As of 2022, one in every 11 jobs in New York City was linked to the securities industry, which is also one of the largest office space tenants, contributing substantially to property-related taxes.

In the fiscal year 2024, the industry is expected to generate $5.1 billion in tax revenue for the city, as noted in the Comptroller’s report. However, due to annual performance evaluations and organizational restructurings, the report also indicates that there may be 3,400 fewer jobs in 2024 compared to the previous year. Investment banks have utilized these reviews to streamline their operations by eliminating underperforming employees and reducing excess staff.

The Comptroller’s report is important as it highlights significant trends affecting the United States' financial hub. Major Wall Street firms are set to begin the earnings season on Friday, which may provide further insights into these trends.

Paraphrasing text from "Reuters" all rights reserved by the original author.