(Yahoo! Finance) - As the AI boom spurs activity across almost every corner of Wall Street, bankers are coming out on top in compensation hikes.
“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.
About half of Wall Street workers are expected to see some increase in compensation in 2026. IPO and M&A bankers are estimated to see the biggest jumps, up as much as 20% from last year, according to first quarter compensation projections from consulting firm Johnson Associates.
Equity trading pros, who saw the biggest pay rise last year among all work groups, are projected to see an average increase of 12.5%. Bankers advising on this year’s deluge of bond issuance are on track for 7.5% pay growth, while those catering to commercial and retail are tracking for a 5% bump.
Workers in alternative investments aren’t projected to fare as well. Without counting carried interest, pay at large private equity firms is trending up 2.5%. Those working at midsize and small PE shops, along with venture capitalists and real estate asset managers, are not projected to receive any pay increases in aggregate.
Meanwhile, bonuses are on pace to fall an average of 5% for private credit workers. They rose an average of 6% in 2025 and 10% in 2024, according to Johnson Associates.
Banks have made “a big comeback” in compensation in recent years, while the attraction of private equity has “somewhat waned,” Johnson argued.
Private markets are currently weathering a period of elevated uncertainty, including retail investor-driven outflows across a number of private credit funds, which has weighed on returns. The private equity industry is also sitting on a large backlog of portfolio companies and is facing increasing pressure to sell to meet investor returns.
Both areas are weighed down by the perceived risk in their exposure to the software industry, which has come under fire as AI model makers release advanced models tailored to specific business and industry tasks.
Giants including Apollo Global Management (APO), Blackstone (BX), Blue Owl Capital (OWL), and KKR (KKR) have actively pushed back at those perceived weak spots, flexing the diversity of their revenue streams this earnings season, including from AI infrastructure investments. But their stocks have all faced pressure year to date, underperforming major bank indexes.
At the same time, the longer-term repercussions of AI and the quickly shifting geopolitical landscape haven’t hampered a frenzied dealmaking environment unleashed by the Trump administration’s regulatory easing. The biggest IPOs anticipated this year include OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT).
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.
By David Hollerith - Senior Reporter
May 7, 2026
