2026 banking bonuses: excellent in equities, poor in private credit
2026 has not been a bad year for banks. Revenues have risen, particularly in equities sales & trading and investment banking. Double digit returns on equity are the norm and even if there hasn't been much hiring, there haven't been many cuts. How about bonuses, then?
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Bonuses may be varied. Newly released research from New York compensation consultancy Johnson Associates, says 2026 bonuses across financial services will increase by anywhere from 5% to over 30% vs. 2025 for front-office professionals, depending on function.
Predictably, the biggest bonus increases will go to those in equities, including both equities sales & trading and equities capital markets. On average, bonuses in these two fields will increase by at least 20%, Johnson Associates predicts, and could even increase by more than 30%.
Private capital bonuses, including both private equity and private credit, do not look so fine. Bonuses for private equity professionals will be either flat or up by just 7.5%, Johnson Associates predicts. Bonuses for private credit professionals will do even worse, and could potentially be down by 7.5%. The latter is not very surprising; private credit has had a torrid year, with software firm devaluations fueling significant substantial stock declines. The stocks of Blue Owl and Ares, two of the largest private credit firms in the world, are down by 32% and 16% year-to-date respectively.
2026 bonuses look more varied in other functions. M&A professionals might expect their bonuses to increase by 15% to 20%, says Johnson Associates. Asset management and wealth management professionals might expect their bonuses to increase anywhere from 7.5% to 15%, depending on their product type.
As such, firm management reaps significant rewards – and can expect their bonuses to increase anywhere from 10% to 20% up. After all, what is a bank if not the people who keep the revenue-generators fed, efficient, and pointing in the right direction?
Alongside the private capital professionals, Chris Connors, a managing director at Johnson Associates, says another group might be disappointed with their bonus at the end of the year: corporate/support functions in the middle- and back-office, such as those in compliance, risk, and audit, among others.
Connors predicts that bonuses for those professionals will increase very modestly; mid-single digits at most, “despite the stronger results, and even some aggressive headcount reductions at some banks.” He says that “they have managed expenses really well,” and that he “would have thought that incentives might be up a little bit higher.” Alas.
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