Wall Street is gearing up for its most generous bonus season since the COVID-19 pandemic, with top traders and investment bankers poised to see double-digit increases as banks reap robust trading revenues.

According to a Bloomberg report shared Thursday, major investment banks like $Bank of America (BAC.US)$, $JPMorgan (JPM.US)$, and $Morgan Stanley (MS.US)$ are planning to raise year-end bonuses by over 10% for many of their trading desks.

At JPMorgan, bonuses for investment bankers are expected to climb as much as 15%, while $Goldman Sachs (GS.US)$ may outpace its peers with even larger increases on select trading teams, according to people familiar with the matter.

What's Driving The Bonus Boom?

This year's hikes mark a sharp reversal from the restrained payouts seen over the past two years when inflation outpaced modest bonus adjustments.

Banks have capitalized on surging trading activity and deal flow in 2024, positioning the sector for one of its best years in history.

Data from New York-based pay consultancy Johnson Associates, cited by the Financial Times in November, forecasts a 2024 pay jump across most banking sectors.

Increases could reach up to 35% in areas such as trading and investment banking, though real estate and retail banking are set to lag.

In 2024, every major asset class — with the notable exception of bonds — has delivered positive returns.

Gold, as tracked by the $SPDR Gold ETF (GLD.US)$ topped the ranking surging by 26.7%, followed by stocks — represented by the $SPDR S&P 500 ETF (SPY.US)$ — which rallied 23%.

A Decade of Record Bonuses

Wall Street has seen bonus payouts soar over the past decade.

The average annual bonus hit $240,400 in 2021, more than doubling from $111,400 in 2011, according to APNews.

This year, strong trading revenues are likely to provide the financial muscle for another sweet round of raises.