Alan Johnson projects a significant bonus boom for Wall Street banks in 2026, signaling a shift in financial sector dominance.
Alan Johnson, founder of Johnson Associates, predicts that 2026 will be the 'Year of the Bank' as big banks are expected to far outpace other financial institutions in bonus growth. The compensation consulting firm hiked its bonus projections by an average of 3 percentage points, noting that four out of five Wall Street jobs will see an increase over last year. Stock traders and IPO bankers are projected to increase by as much as 30%, while M&A bankers and senior executives see a 17.5% jump. This trend marks a significant shift from the previous decade, where alternative asset management firms like private equity and hedge funds dominated. While banks are leading the pack, the collective headcount at the country's six largest banks has remained relatively flat, with 80% of financial services executives expecting workforces to shrink by at least 20% over the next five years. Johnson noted that AI is already impacting the workforce, with many firms prioritizing efficiency over hiring.