What Investment Bankers Can Actually Expect to Earn in 2026

Wall Street just posted one of the best quarters in its history — and the bonus math behind that quarter is now getting real.

Every major U.S. bank beat estimates in the second quarter. Goldman Sachs had the best quarter in its 157-year existence. Equities revenue was up 69–86% across JPMorgan, Goldman, and Morgan Stanley. Investment banking fees were up 30–58% at the same three firms. Johnson Associates, the consultancy whose year-end bonus projections are the closest thing the Street has to a shared scoreboard, just raised its 2026 forecast for the second time this year and is calling it the “Year of the Bank.”

That's the headline. It's also not the whole picture. In our 2025 Investment Banking Compensation Report — 866 respondents, published this past March — we documented a real recovery, but one with a soft spot right at the senior end: MD (4+ Yrs) was the one level where the bonus recovery actually stalled, and mobility stayed stubbornly high even as pay rose. The first half of 2026 has extended the recovery for most of the Street, but it has also sharpened that senior-level divide into something closer to a sorting mechanism. Here's what the data actually says, and what it means for your bonus.

The Recovery We Already Documented

Our 2025 survey found 79% of eligible respondents took home a bigger bonus than in 2024 — broad, and consistent across bank types (EB 88%, BB 83%, MM 80%). Three-year total comp growth from 2023 to 2025 ran from roughly +8% at Analyst 1 up to +30–35% at MD levels and +57% at Group Head, which tells you exactly where the recovery money concentrated: at the top.

The one level that didn't participate the way the headline number suggested: MD (4+ Yrs). Only 47% of that cohort saw a higher bonus in 2025, and 26% saw a decline — the only title where more than a fifth of respondents took a cut. We also flagged that the $1,100K headline median for that group was hiding a split: EB, BB, and Canadian respondents clustering near $1,500K, Boutique IB and Large US Bank respondents clustering closer to $738K. That gap is exactly the kind of thing 2026's results have started to explain.

The Bulge Brackets Had the Best Quarter in Years — Possibly Ever

Every major U.S. bank that breaks out investment banking as its own line posted double-digit fee growth in Q2 2026, and the growth wasn't concentrated in one product. JPMorgan's IB fees were up 30%, with double-digit growth across every product. Goldman Sachs posted investment banking fees up 55% and a record quarter overall, with CEO David Solomon pointing to an advisory backlog at its highest level in five years and large-cap M&A volume up 90% through the first half. Morgan Stanley's investment banking revenue jumped 58%. Citigroup's investment banking revenue rose 44%, and Bank of America's IB fees were up 50%.

The detail that matters most for bonus math specifically: Goldman CFO Denis Coleman said the quarter delivered “material operating leverage” — revenue grew roughly 40% while compensation expense grew roughly 30%. That's the pattern to watch across the industry. When comp expense grows more slowly than revenue, firms are holding the comp ratio flat or letting it compress, which tends to reward top performers rather than lift every seat by the same percentage.

The Elite Boutiques Are Not All Having the Same 2026

This is where the story gets more interesting than “Wall Street is up.” The elite advisory boutiques had a genuinely split first half.

Evercore, PJT Partners, and Moelis all posted records. Evercore's Q2 revenue hit roughly $1.0 billion, up 19%, with advisory fees at a record $776 million and underwriting fees up 201% — the best underwriting quarter in the firm's history. Management said its backlog remains near record levels and the firm has added 19 new senior managing directors year-to-date. PJT Partners posted record Q2 and first-half revenue, up 20% and 24% respectively, with strategic advisory, private capital solutions, and restructuring all contributing — and the firm explicitly cited increased senior hires as part of its rising compensation expense. Moelis beat estimates with revenue up 12%.

Houlihan Lokey didn't. The firm missed Wall Street's revenue estimate for its fiscal Q1 2027 (the quarter ending June 30, 2026), with sales down 15.6% year over year to $511 million and non-GAAP EPS nearly 18% below consensus.

And then there's Lazard, which is the real signal worth sitting with. Revenue grew — $808 million in Q2, with Financial Advisory at $445 million and Asset Management up 23%. Net income came in at just $5 million, down from $55 million a year earlier — a 91% decline — and the firm trimmed more than 80 MD roles in the same quarter. CEO Peter Orszag framed the moves as portfolio quality, not crisis management, alongside the firm's strongest half-year league-table position since 2014.

As we wrote when the Lazard numbers came out: the fact that this happened during a record dealmaking market, not a downturn, is the point. A senior banker with a thin deal sheet has nowhere to point right now — no soft market to blame, no dry pipeline, no macro excuse. That's exactly the environment in which a firm can finally see, cleanly, who's actually generating revenue and who's a fixed cost riding alongside it. Goldman has quietly moved toward smaller, continuous, rolling performance-based cuts in 2026 rather than waiting for a downturn — the same logic Lazard just applied at boutique scale.

Put together, the EB story for 2026 isn't “elite boutiques are having a great year.” It's that a strong tape is now separating platforms — and individual bankers — that are actually converting deal flow into revenue from those that aren't, regardless of bank type. That's consistent with what our 2025 data already showed at the MD (4+ Yrs) level: the bimodal split between firms wasn't noise, it was an early read on exactly this dynamic.

Record Profits, Fewer Heads: What Wall Street's Hiring Actually Looks Like

Here's the part that should reshape how you think about your 2026 bonus pool: the same banks posting record revenue are also cutting headcount, aggressively, in the same quarter.

Bloomberg's tally of Q2 2026 workforce disclosures found headcount at Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley combined fell by more than 10,000 employees in the second quarter alone — during the same quarter these firms posted record trading and investment banking results. That builds on a 2025 in which the six largest Wall Street banks cut combined headcount by the most since 2016. Citigroup alone remains on track to cut about 20,000 roles by the end of 2026 as part of a restructuring that, combined with the Banamex spinoff, will take total headcount down to roughly 180,000. Wells Fargo has now posted 24 consecutive quarters of headcount reduction.

The critical nuance, and the one that actually matters for compensation: this is not primarily a front-office story. JPMorgan has published the clearest breakdown — operations roles trimmed about 4%, general support functions about 2%, while headcount tied to client engagement and revenue generation actually rose about 4%. Wells Fargo describes the same pattern explicitly: expanding client-facing roles while reducing operational support. Bank of America is the partial exception — a reported 1% reduction in its global banking and markets division did touch some MDs, Directors, and VPs, not just support staff — but even there, the broader message from management has been aimed at back-office and control functions going forward.

Meanwhile, the lateral market for the specific bankers who do generate revenue hasn't cooled at all. If anything, it's tightened further around a narrower band of candidates. As we wrote in “The Great Poach,” banks stopped casting wide nets for lateral hires and started running forensic, deal-by-deal interrogations of exactly who did what on exactly which transactions — hunting specifically for proven A2s, A3s, and junior VPs with public-to-public M&A experience, while showing almost no interest in uptiering candidates from lower-tier platforms. That dynamic hasn't reversed; it's the same logic now showing up at the MD level inside Lazard and, per Goldman's rolling review process, potentially elsewhere.

The picture underneath the headline: Wall Street looks smaller on paper in 2026, but it is not hiring less in the parts of the business that make money. The operational tail behind each deal is shrinking. The deal teams themselves, so far, largely are not — and the bankers on those teams are the ones the rising bonus pools are actually funding.

What the Bonus Consultants Are Now Saying

Johnson Associates released an updated 2026 forecast in early August — its most bullish of the year, revised up roughly three percentage points from its Q1 estimate on the back of the results above. The firm's framing echoes what the earnings data already shows: big banks are pulling ahead of the rest of finance, to the point that Johnson Associates is calling 2026 the “Year of the Bank.” Private credit, real estate, and mid-sized private equity firms are projected to see flat-to-declining incentive pay by comparison.

Johnson Associates also flagged the same headcount discipline described above: banks are not hiring aggressively even as bonus pools expand, and aggregate headcount at the six largest Wall Street banks has barely moved in five years. Fewer heads, bigger pools, concentrated among producers — that's the mechanism behind every number in that table.

What This Means for Your 2026 Bonus, Level by Level

• Junior and mid-level bankers (Analyst through VP) should see another broad-based increase, but weighted more toward equity- and ECM-linked groups than fixed income or leveraged finance — Johnson Associates' function-level split tracks the actual revenue mix reported by every bank above.
• M&A-focused MDs and Directors are positioned for a real rebound after 2025, when this was the one level where the recovery stalled in our survey. A five-year-high advisory backlog and 90% growth in large-cap M&A volume both point toward MD (4+ Yrs) catching up — but Lazard's quarter is a reminder that catching up will not be uniform. The EB/BB-vs-boutique bimodal split we documented in 2025 is likely to widen before it narrows, not the other way around.
• Equity-focused bankers and traders are the clear standout — equities revenue was up 69–86% across the three banks that broke it out, and Johnson Associates' 20–30% bonus projection for that group reflects it directly.
• Deferred comp still eats into the headline number the higher you go. Our 2025 data showed a VP 1 at a $500K headline total taking home roughly $447K in year-one cash, and an MD (4+ Yrs) at $1,100K taking home roughly $887K — a gap that widens with seniority because deferral rates rise with seniority (67–70% of MDs defer more than 25% of bonus). A 15–20% MD bonus increase will not show up as a 15–20% increase in your Q1 2027 checking account.
• Geography is still the most underrated lever. A Midwest VP 1 at $525K nominal — matching New York dollar for dollar — carried an estimated $861K of NYC-equivalent purchasing power in our 2025 data. As nominal pay rises across the board in 2026, that regional advantage is structural, not cyclical, and should hold or widen in percentage terms.
• Mobility pressure isn't going away. 64% of all 2025 respondents told us they were open to or actively considering a move, rising to 78–82% at MD and Group Head. With headcount essentially flat industry-wide and bonus pools growing per head rather than per additional hire, competition for the bankers who are actually producing should intensify, not ease, even as average pay climbs.

The Caveats

None of this is locked in. Bonus pools get finalized in the fourth quarter against full-year results, and a slowdown in deal activity or a market correction in the back half of 2026 could compress these numbers before they're paid out — Johnson Associates' own forecast already moved three points between Q1 and Q3 of this year, which tells you how fast the underlying picture can shift. And as Lazard's quarter shows, a rising tide is no longer covering for individual performance the way it used to. The clearest read of 2026 so far: the money is real, the growth is real, and it is being distributed with more discipline than at any point since the recovery started.