While investment bankers will probably see big jumps in their annual bonus, securities traders likely won’t get the same increase — and could even see a 5% drop, according to a new report from HR consulting firm Johnson Associates.
The data was first reported by Bloomberg News’ Sarah Ponczek:
Fees from advising on mergers and selling stocks and bonds for companies rose at four of the five biggest firms last quarter, offsetting lower trading results. Bankers who underwrite equity and debt will probably see annual bonuses surge 10 percent to 20 percent or more, while those in retail and commercial banking can expect raises of 5 percent to 10 percent.
As markets climbed steadily higher this year, the VIX volatility index plunged to historic lows. Trading desks, once the powerhouse of banks’ profitability, took big hits because of the drop.
Goldman Sachs, JPMorgan, and Bank of America all reported declines in fixed-income trading in the second quarter. Morgan Stanley was the only bank to post trading gains, despite what the CEO called a “subdued environment.”
Hedge fund employees can also expect their bonuses to increase up to 5% this year. That’s despite some name brand funds not doing well. According to investor letters obtained by Business Insider, many major funds are struggling to find positive returns.
Maverick Capital, a $10.5 billion hedge fund manager, made no money on its flagship fund in the first half of 2017. The S&P 500, which the fund compares itself to, rose 9.3% over the same period.