Executives at some of Wall Street's biggest banks are gearing up to give their traders and dealmakers hefty bonus raises. According to insiders, Bank of America is planning an average increase of 10% for its staff working with investment banking and trading sectors that include stocks and fixed-income products. People familiar with JPMorgan Chase's and Morgan Stanley's plans indicated bonuses for their traders would rise more than 10%, as reported by Crain's New York.

In addition, JPMorgan's investment bankers are staring at a bonus uptick of about 15%. Rumors suggest that Goldman Sachs Group may top these figures for certain trading desks, though official spokespeople from the banks have declined to comment. This trend flips the script from the prior two years, where banks had shown moderation in bonus distributions, with the pandemic-induced fluctuation of market activity contributing to a conservative approach to compensation, according to a Bloomberg report shared yesterday.

The motivation behind these expected raises is tied to a flourishing market in 2024, where banks experienced increased trading activity and dealmaking. This surge is on course to categorize 2024 as one of the industry's best-performing years. Consulting firm Johnson Associates has projected in a report that the bonuses across banking sectors could climb by up to 35%, with certain areas like trading and investment banking basking in the most significant increases. That said, sectors such as real estate and retail banking may not see similar jumps in compensation.

Highlighting the magnitude of this bonus uptick, Wall Street's annual average bonus was reported to have skyrocketed from $111,400 in 2011 to $240,400 in 2021, as stated by APNews. With the current momentum, 2024 looks positioned to carve yet another record-breaking year in bonus allocations. Notably, every primary asset class, barring bonds, delivered positive returns last year, with the SPDR Gold Trust and the SPDR S&P 500 ETF Trust seeing respective increases of 26.7% and 23%, thus injecting further fuel into the bonus frenzy, as detailed by Bloomberg.