Meanwhile, each Kansas City Chiefs player is slated for $338,000 in bonus pay…
In the world of professional sports, six-figure sums are small potatoes. Super Bowl MVP Patrick Mahomes is working under a 10-year contract worth $450 million, according to Spotrac.
“This is not even chump change for him,” said Alan Johnson, managing director at Johnson Associates, a financial-services compensation consulting firm.
The stock market made a comeback in 2023, but the recently concluded year isn’t looking so hot for Wall Street bonuses, according to Johnson.
The 2023 bonuses getting paid out in 2024 are projected to stay flat or decline, according to Johnson’s firm. For example, people in investment-banking advisory work may see a 15% to 25% year-over-year drop in the value of their cash bonuses and equity awards, according to the firm.
Johnson’s firm analyzes different bonus figures from a tighter range of financial professionals than the Comptroller’s Office does. By his count, a yearly bonus in the range of $300,000 to $500,000 is common, Johnson said. Seven-figure bonuses “are not common” and reserved for the top 5% to 10% people at a firm, he said.
Wall Street bonuses aren’t just icing on the cake of finance jobs: They often represent a large chunk of a Wall Street employee’s compensation. For lower-level employees with bonuses in the $300,000 to $500,000 range, their bonus could be 50% of their pay. For Wall Streeters with a seven-figure bonus, that might be 60% to 80% of their pay, he said.
Johnson sees pay parallels between the football field and the C-suite. Each career can be short-lived with cutthroat competition and lots of burnout.
Careers in the high end of financial services can typically end in a person’s early 50s, he said. It’s safe to say a football-playing career is even shorter.
“For the amount of money these people make, it should be a grind, it should be competitive,” Johnson said. That statement holds true for both finance and football, he noted.
MarketWatch / February 12, 2024
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