NEW YORK — Wall Street is likely to cut bonuses this year by 15-20% and make significant layoffs, according to a report published Tuesday by compensation consulting firm Johnson Associates Inc.
The estimates in the report by Alan Johnson, closely watched by financial professionals, are less severe than Johnson projected earlier this year. https://reut.rs/2WQHj5s
But the pay cuts and layoffs may be more widespread as firms fail to meet their 2020 business and financial objectives and adjust to more staff working from home, according to the report.
Incentive compensation will be under strict scrutiny this year and will take into account companies’ performance during the coronavirus crisis and the Black Lives Matter movement.
This scrutiny will extend to chief executives’ compensation at public companies, Johnson wrote.
“With the impact of COVID-19 and recent focus on justice and equality, it will require a thoughtful analysis and balance of performance, competitive and societal priorities, and customer and employee expectations,” Johnson wrote. “This is not a year to be tone deaf.”
The ratio between CEO and worker pay, which banks publish annually, will receive significant attention this year as advocates for greater equality bring mainstream focus to the figures, Johnson wrote.
(Reporting By Elizabeth Dilts Marshall; Editing by Cynthia Osterman)