With the economy slowly bouncing back from coronavirus quarantines, the Wall Street bonus season is shaping up to be less of a nightmare and more of a very bad dream.
The latest survey by compensation consultant Johnson Associates predicts that financial services pay will be slashed by 15 percent to 20 percent by 2020 – a vast improvement from the 30 percent cuts the same survey predicted in mid-May.
“The dug halfway out of the hole,” the report’s author, Alan Johnson, told The Post. “But that said, after a pandemic and social unrest, it’s going to be an emotional-filled end of the year.”
Adding to the year-end drama, Johnson said, will be an uptick in pink slips, as Wall Street looks to cut costs in the aftermath of the pandemic, which is expected to lead to a decline in business for retail and investment bankers. rising loan defaults and a frozen M&A landscape.
“Retail bankers, in particular, will be way off this year,” mused Johnson, “which tells you how weird this year will be, as the sector is usually very stable.”
One group that can relax a bit is the traders, who stand to ride a stock market rally to stellar year-end results if prices remain buoyed by Federal Reserve cash and positive sentiment that a COVID-19 vaccine will be discovered as early as 2021.
“Traders will do well,” said Johnson, referring to the dueling realities of the stock market and the economy.
Johnson’s report also predicts that the Black Lives Matter movement could have a real impact on year-end pay considerations, with executive compensation and pay ratios being looked at through a new lens as financial firms reckon with racial inequities within their own walls.
“This is not a year to be tone deaf,” Johnson said.