Some traders have wild bonus expectations this year
There's a lot of fear around bonuses right now. Across many financial services sectors, people are expecting them to drop, sometimes in a big way. In some areas, though, people are wildly optimistic. The eFinancialCareers end of year survey shows us which areas those are.
Commodities sales and trading
Commodities salespeople and traders are going to be particularly disappointed if their bonuses fall in 2022. After an abnormally good year for commodities desks (revenues are expected to increase by over 60%), commodities professionals expect their bonuses to rise by 70%. This is after a pretty good year for pay last year, too.
Commodities traders didn't hold back on the excitement in comments. Someone at a commodities trading house declared that he's already “rich af.” Less crudely, a trader at a bank said, “business is booming.”
Macro sales and trading
It's also been a pretty good year for macro (rates and FX) salespeople and traders, who think their bonuses will rise by an average of 28%. With some individual traders reportedly generating up to $100m PnL for their firms and rates revenues doubling at Deutsche Bank in the third quarter, this would seem well-deserved.
That doesn’t mean all macro traders are happy. Employees at Canadian banks are paid before everyone else. One Scotiabank director complained of his “meaningless” salary increase. However, a VP at TD Securities informed us that he'd been told, “high performers will get paid regardless of overall dealer results.”
Technologists might be expecting bonuses to fall 2% this year, but quants (and possibly quant developers) are more optimistic. This reflects strong demand for quant talent from both banks, hedge funds and electronic trading firms.
Credit sales and trading
Lastly, it hasn't been that good a year in credit sales and trading as a whole, and yet credit salespeople and traders are feeling fine about bonuses. They expect them to rise by 15%. This probably won't be the case at JPMorgan, where the high yield desk has made a big loss, but reflects optimism elsewhere. The optimists said they were star performers. One Barclays associate said profits are up, and they're expanding and will by implication want to retain existing staff.
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