Wall Street bonuses seen flat as Iran war, private credit weigh

Wall Street’s next bonus cycle is shaping up as a reset, not a rerun. After New York’s securities industry paid out a record $49.2 billion in bonuses for 2025, pay consultants now expect 2026 awards to land flat to slightly positive, with geopolitical tensions tied to the Iran war and turmoil in private credit threatening to slow the economy and the incentive pools that feed year-end compensation.

That matters inside Goldman Sachs because the firm’s own recent numbers show how uneven the year could be across desks. Goldman reported first-quarter 2026 net revenues of $17.23 billion and net earnings of $5.63 billion, with diluted earnings per share of $17.55 and an annualized return on equity of 19.8%. Global Banking & Markets brought in $12.74 billion, including $2.84 billion in investment banking fees, $1.49 billion in advisory revenue, $811 million in debt underwriting, $4.01 billion in fixed income, currencies and commodities revenue, and $5.33 billion in equities revenue.

The message for bankers, traders, and support staff is that pay still tracks where the work is most active. Goldman said the quarter included record equities revenue and a significant increase in completed mergers-and-acquisitions volume, which points to a narrower set of desks carrying more of the upside. If the second half of the year gets choppier, teams tied to advisory, trading, and client flow could keep outperforming while slower product areas stay flat.

That would be a morale test as much as a compensation one. A flat-to-slightly-up bonus year is still better than a down cycle, but it can blunt the feel-good effect of a strong revenue print, especially for junior bankers and associates who are watching not just total compensation but promotion timing, seat quality, and whether their desk is gaining or losing internal leverage. In a place like Goldman, where prestige and exit opportunities are often tied to the quality of the franchise you sit in, the difference between a hot and lukewarm desk can shape who stays, who transfers, and who starts looking elsewhere.

The broader context is that the 2025 bonus pool was not just large, it was historically large. Thomas P. DiNapoli, the New York State Comptroller, said the average bonus rose 6% to $246,900 and that Wall Street profits topped $65.1 billion, more than 30% above the prior year. The comptroller’s records date to 1987, which makes last year’s payout a clear benchmark for 2026 expectations. Goldman’s own 2025 annual report showed net revenues up 9% to $58.3 billion and EPS up 27% to $51.32, and the firm’s April 29 annual meeting in Salt Lake City, Utah included an advisory vote on executive compensation, another reminder that pay remains a live issue at the top.