2025 Bonus Recap: The Bull Market Returns to the Bonus Pool
As we move through the first quarter of 2026, the data for the 2025 bonus cycle is finally in, and the sentiment across the Street is the most positive it has been since the 2021 peak. After two years of "belt-tightening," the 2025 payout season reflected a robust recovery in deal flow and a desperate need for firms to retain mid-level talent.
According to the latest year-end reports, most investment banking business units saw significant year-over-year (YoY) incentive increases. Driven by a surge in refinancing and a late-year M&A rally, the "bonus drought" has officially broken.
Key Takeaways by Product Group
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Debt Underwriting: The clear winner this year. Incentives surged by 25% to 35% as corporations rushed to the markets to get ahead of rate volatility.
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Equity Sales & Trading: Continued market turbulence and high volumes led to a 15% to 25% boost in payouts.
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M&A Advisory: Despite a sluggish Q1 2025, a second-half "deal revival" pushed M&A bonuses up by 10% to 15% YoY.
For those at the Vice President level, 2025 was a standout year. Firms are increasingly viewing VPs as the "linchpins" of execution in an accelerating market. Top-tier VPs at bulge bracket and elite boutique firms have seen bonus pools increase significantly, with "top-bucket" performers seeing all-in compensation push toward the $450k–$480k range.
Outlook for 2026
While 2025 was a "rebound year," the sentiment for 2026 remains one of "measured caution." Most firms are entering this year with a strong pipeline but are keeping a close eye on global trade tensions and the lasting impact of 2025's regulatory changes.
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