Bonuses bounce back on Wall St as markets rally

WALL Street bonuses may bounce back in 2009 as markets recover, although some awards will be lower than usual and the political fallout will take its toll, a study has showed.<br /><br />Annual cash and share payouts for staff in fixed income trading will rise by 50-60 per cent compared with 2008 as interest rate, currency and commodity businesses do well, according to the study by compensation consultancy Johnson Associates. Those involved in equities are likely to get increases of between 40 per cent and 50 per cent as stock markets stabilise and gain strength. However, bonuses will fall by up to 30 per cent in areas such as prime brokerage, where the value of assets under management continues to suffer from the crunch.<br /><br />Other areas likely to take a hit include hedge funds, private equity, commercial banking and advisory operations in investment banking.<br /><br />Bonuses will also depend on factors including the speed of the recovery, new regulation and how quickly banks rescued in the credit crunch are able to pay back government aid.<br /><br />Johnson said it expected a &ldquo;growing divergence in incentive compensation across the financial services industry&rdquo; after three quarters.