Study Says Equities Traders’ Bonuses Set to Fall

It looks like another tough year for securities traders as year-end bonuses for fixed-income and equities employees are set to fall by as much as 30 percent from last year, according to revised estimates from a New York-based compensation consulting firm.

According to published reports, bonuses for equity traders will be flat to down 15 percent. Meanwhile employees in the prime brokerage divisions that service hedge funds may still get as much as 5 percent more in bonuses, reported compensation consultancy Johnson Associates Inc.

Fixed-income traders might fare worse, as their bonuses and that of their departments are expected to fall more precipitously, between 20 to 30 percent. This is in stark contrast to earlier estimates this year that indicated bonuses would climb 10 to 15 percent. Senior managers will probably receive bonuses that are unchanged to 30 percent lower, the firm said.

Johnson said the new estimates are driven by a "lack of economic recovery" as well as regulations and the "ongoing uncertainty in world markets."

Employees in stock funds, private equity and hedge fund workers and people who advise high net worth individuals will probably get bonuses that are flat to 5 percent higher, Johnson said.