As Bank Bonuses Soar, PE’s Biggest Firms Play Catch-up

End-of-year bonuses for private equity professionals are likely to be higher at larger managers compared to midsized and small buyout shops, as banks’ blowout earnings put pressure on PE firms to keep pace on pay, according to projections from compensation consultant Johnson Associates. 

The jump is due, in part, to mounting competition for talent between PE firms and banks, said Alan Johnson, president and founder of Johnson Associates. “Banks and private equity compete for talent, and as the banks do better, there’s going to be a bit of a drag-on effect to private equity,” Johnson said. 

Bonus expectations at midsized and small buyout firms remained flat from Q1, meaning they are unlikely to see a change in their bonus as a percentage of their salary YoY. 

“The economics are just better when you’re bigger,” Johnson said. “When you double your assets, you don’t come anywhere close to doubling the number of people you need, so you have more fee-paying assets per person than a mid-size or smaller firm.” 

Moving forward, Johnson said that regardless of performance, all private equity firms are slowing their hiring as they automate processes. 

“Firms are not doing a lot of hiring,” he said. “The impact of technology and AI is that you’re going to need fewer people going forward, and no one wants to be the firm that hires 500 people and then two years from now, lays off 500 people.” 

PitchBook / August 5, 2026