Bonuses for both equity and fixed-income traders could jump as much as 20% this year, according to compensation consultant Alan Johnson, the managing director of Johnson Associates Inc.

“This is their heyday” after several years of virtually no change in compensation, Johnson said Wednesday in an interview. “Sales and trading now is mainly a customer business, so you’re benefiting from the flows.”

While some traders are looking forward to a pay windfall at the end of the year, the outlook for the rest of the industry isn’t so rosy. Bonuses for merger advisers could tumble 25% or more, and payouts for underwriting work could drop 15%, according to Johnson.

Bonuses could fall 30% in retail and commercial banking as a surge in provisions for losses outweighs loan origination and deposit growth, he said, adding that the pay forecasts might be too optimistic depending on how the easing of lockdown restrictions plays out.

“If this opening up turns out to be a real problem, and then we have further shutdowns,” Johnson said, “then things could get a lot worse.”

Bloomberg News / May 13, 2020