Wall Street pay will bounce in 2012 from last year’s sharply reduced levels, but bonuses will be lower and have more strings attached than before the financial crisis, the latest tally of finance-industry compensation shows.

So-called incentive-based pay, which includes cash and stock awards, is set to climb 5% to 10% from a year earlier, according to a forecast set to be released Monday by consulting firm Johnson Associates. At the same time, financial firms are keeping a lid on cash outlays by deferring more pay and trimming their workforces.

“We are as low as we have been in 10 or 15 years,” said Alan Johnson, managing director of Johnson Associates, referring to Wall Street’s bonus pool. “It’s the new normal.”  Mr. Johnson said an equity trader who is managing director at a major firm could receive as much as 70% of his pay at a later date, an arrangement that ties more compensation to long-term performance.

Reflecting a big rebound from last year’s plunge, the survey said bond traders—among the hardest hit in terms of pay in 2011—could see their bonuses rise 10% to 20%, even though several firms are scaling back fixed-income trading operations.

The Wall Street Journal / November 4, 2012