Despite a turbulent year for the financial markets, incentive compensation in the finance sector is expected to see an upward trend across most areas, with gains driven by market appreciation, debt underwriting, and active exchange-traded funds (ETFs), according to New York-based Johnson Associates’ third-quarter compensation projections.
The report anticipates that traditional asset management incentives could rise between 7% and 12%, buoyed by equity market growth and active ETF inflows. Hedge funds may experience a 5% to 15% increase in incentives, primarily due to strong performance in equity and event-driven funds, Johnson Associates said.
Investment and commercial banking also shows promise, particularly in debt underwriting, where incentives are projected to rise by as much as 35%, supported by growth in debt issuance and market volatility, which has led to higher client trading volumes. Equity underwriting and sales are also expected to see substantial gains, with incentives potentially increasing by up to 25%.
Private credit remains a standout within alternative investments, expected to see a 10% or higher boost in incentives as demand grows and hiring competition intensifies.
See the full report at https://johnsonassociates.com/wp-content/uploads/2024/11/Johnson-Associates-Q3-Comp-Estimates-2.pdf
