(Reuters) – Bonuses for Wall Street dealmakers could expand by 7.4% in 2024 as a rebound in dealmaking boosts fees pocketed by investment banks, according to a report published by New York State Comptroller Thomas DiNapoli on Wednesday.
The anticipated surge would mark the first increase in two years as corporations begin to emerge from a subdued dealmaking environment.
Economic resilience, a searing rally in stocks and the beginning of a potential rate-cutting cycle have allowed companies to pursue takeovers and sales of stocks and bonds.
Bonuses constitute a significant portion of compensation on Wall Street. The industry’s fortunes also influence the economy of New York City and the state.
One in 11 jobs in New York City was tied to the securities industry as of 2022. The industry is also among the largest tenants of office spaces, contributing to property-related taxes.
In the fiscal year of 2024, the industry contributed $5.1 billion in tax revenue to the city, the Comptroller’s report said.
However, annual performance reviews and restructurings may lead to 3,400 fewer jobs in 2024 than a year ago, based on preliminary data the report cited.
Investment banks have used such reviews to streamline their operations by eliminating underperformers and trimming excesses within their ranks.
The Comptroller’s report is significant because it sheds light on key trends shaping the financial hub of the United States.
Major Wall Street firms are set to kick off the earnings season on Friday, which could provide more insight into these trends.
(Reporting by Niket Nishant in Bengaluru; Editing by Shreya Biswas)
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