Wall Street Bonuses Fall by Most Since 2008

Bonuses are a large part of a banker’s annual compensation. Firms usually grow their bonus pools throughout the year as they bring in revenue. Bankers are typically notified in late January about how much money they will receive.

The smaller checks weren’t a surprise for many workers. Big Wall Street banks had cut 2022 bonus pools by as much as 40% as revenue tanked, The Wall Street Journal reported in December. Firms saw more than $50 billion in revenue wiped out last year from 2021, according to data from Dealogic, as they brought in fewer deal-advising fees, stock offerings and bond sales. That was the biggest year-over-year decline on record. 

Last year’s bonus pool was $33.7 billion, down from $42.7 billion the previous year, according to the comptroller’s office. As a result, the average Wall Street bonus fell by the highest percentage since 2008, the year the financial crisis ravaged markets and sent the economy tumbling into a deep recession.

Executives had warned bankers that 2021 was a blockbuster year and they shouldn’t get used to it. Firms brought in higher profits that year as more companies struck deals or went public.

“Let’s just spell it out here: ‘This is going to be a more difficult compensation season at Jefferies, just like it will be for every firm in our industry,’” leaders of the bank Jefferies Group LLC told staff in a December memo.

Banks have been cutting jobs in recent months after years of hiring during the pandemic. Companies like

Morgan Stanley

and

Goldman Sachs Group Inc.

have laid off thousands of employees to offset a drop in deal making revenue.

More bankers were expected to get no bonus for 2022, which banks often use as a way to communicate that the employees…