2024 was the first year named executive officers at non-alternatives firms received carried interest awards. The firms that granted carry to NEOs in 2024 continued to do so in 2025. No new companies have initiated awards, though we expect they will as financial services firms continue to diversify.

One-time awards were subdued in 2023 and 2024 amid shareholder pushback, then rose sharply in 2025. We believe this is a result of the reduced influence of proxy advisory firms.

Director pay increases remained muted, roughly tracking inflation, even as the role grows more intensive and complex. Executive increases, by contrast, continued to rise significantly, showing a de-link from firm-wide incentives.

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Trading profits are at record highs, and so are employee bonuses. Mergers, acquisitions and other deals are piling up at the second-fastest pace in at least a decade, producing billions of dollars in fees.  

The good times for banks represent a flip of fortunes. Since the 2008 financial crisis, Wall Street’s biggest paydays have been earned by private equity and private credit firms, making often high-risk investments with the promise of high returns. Lately, many of those private equity firms have struggled to raise money as the industry has delivered lackluster investment returns. 

The good times are encouraging the newest generation of bankers. Alan Johnson, founder of a namesake Wall Street pay consultancy, projects that investment bank employee bonuses this year will be 10 to 20 percent higher than in 2025. 

Mr. Johnson contrasted the imminent banker windfall with private equity pay, which he compared in many instances to “a lottery ticket that won’t be worth anything.” 

“It is the year of the bank,” he said. 

The New York Times / May 22, 2026

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This short one-pager shows how a carry-for-carry trade compares to a cash buyout. The illustrative example walks through the trade-offs across timing, payout variability, vesting, and the fair market value of carried interest.

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“I think certainly some of the gloss is off of private equity,” says Alan Johnson, founder of Johnson Associates. “If you were to go back five years, you would say everyone wants to work in a PE firm. The pay dynamic [was] clearly much better than anywhere else. Fast forward to today, … the pay dynamic is not clearly as good, and certainly banks and others are paying a lot more than they did, so that dynamic has changed.” 

Additionally, hedge funds are in a talent war for star portfolio managers and elite quant talent, driving up compensation and, for some, resulting in bonuses in the tens of millions. 

“I think [hedge funds have] benefited from the slowdown in private equity. I think a lot of clients—pension funds, wealthy investors—feel overexposed to private equity, and that has benefited two sectors,” Johnson says. “One is hedge funds, if [investors] say, ‘I am in the major alternative asset classes, I’m already overweight to private equity, so I’m going to shift some of my portfolio to hedge funds.’ The other beneficiary from the slowdown in private equity is secondaries.” 

Chief Investment Officer / May 7, 2026 

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“The big banks had a very good 2025. They’re doing at least as well, if not better, this year, and pay will be up significantly,” Alan Johnson, managing director of Johnson Associates, said in an interview. 

“They’re going to be pay leaders for the first time in probably a decade,” Johnson added. 

The report also provides guidance on how AI is expected to influence pay and talent in the quarters ahead as automation takes over junior analysts’ workloads. 

“Longer term, there may be fewer people in the [finance] industry, but on average, they’re going to be better, have more diversified skills, and probably will get paid more money,” said Johnson. 

“If you can weather the AI storm, your career opportunities are maybe even better,” he added. 

Yahoo Finance / May 7, 2026 

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“We do expect bigger bonuses this cycle, and they will be heavily skewed toward top-tier dealmakers,” said Chris Connors, a managing director at Johnson Associates. “There is real competition for that talent, and firms are paying up to keep it.” 

Still, the consultant cautioned that its predictions could change. Johnson Associates said in its analysis that “projections [are] fragile given macro factors” and that geopolitical problems and stress in private credit could “slow [the] economy and hamper results”. 

Predicted bonus increases at investment banks compare favourably with expectations on the buyside. Bonuses for private credit professionals are expected to fall by up to 7.5% as liquidity concerns have engulfed the previously buoyant sector. 

Bonuses at large private equity firms are tipped to rise by up to 5%, with secondaries employees expected to book the biggest increases at 10%. 

Financial News London / May 7, 2026

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“It’s the year of the bank,” Alan Johnson, managing director of Johnson Associates, said in an interview. “It’s a horse race between trading and M&A advisory.” 

“If you look to revenue per head across private equity, private credit, you name it, firms are more productive,” Chris Connors, managing director at Johnson Associates, said in a Bloomberg Television interview Thursday. “They have less heads, but also top line growth is there. This is why this is the year of the bank.” 

Still, most of the financial industry should be happy with performance so far, and how that’s reflected in year-end bonuses, as long as the deal pipeline and trading activity remain strong. 

“It’s early,” Johnson said, “but things are surprisingly optimistic again, knock on wood — for now.” 

Bloomberg / May 7, 2026

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Englander’s Millennium Management may provide another avenue for “certain” executives and portfolio managers to invest the deferred portion of their annual bonuses. Instead of putting the deferred pay into a Millennium fund, they could swap it for a profits interest in the management firm itself.

Cohen’s Point72 Asset Management is exploring a different option: allowing some portfolio managers to eat more of their own cooking. They would get to invest in the strategy they run for Point72’s flagship multistrategy fund.

“They are diversifying capital across hundreds of teams,” said Bryan Liou, a managing director at Johnson Associates Inc., a compensation consultant that specializes in the financial services industry. “The idea is you are not only hopefully getting better returns, but also more stable returns.”

Deadline Disclosures / May 6, 2026

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Overarching Caveats: Year-end projections fragile given macro factors. Geopolitical turmoil and credit stress key downside risks thatcould slow economy and hamper results. Q1 results strong and sentiment remains high despite these uncertainties.​

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Johnson Associates explores offers practical, creative solutions to strengthen compensation programs and sustain incentive value.

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