Wall Street Workers May Want Bonuses Ahead of Possible Biden Win
Wall Street firms may start facing pressure to pay out bonuses earlier than usual as their employees worry about the prospect of higher taxes under a Biden administration and Democrat-controlled Senate.
Employees may ask to receive year-end incentives before the end of 2020 instead of early next year, when they would typically get the bonuses, said Alan Johnson, president of Johnson Associates Inc., a New York-based compensation-consulting firm.
“You’re going to hear about, ‘This firm did this, and that firm did that,’” Johnson told companies at a virtual industry conference Monday. “You don’t want to be caught unaware.”
Democratic presidential candidate Joe Biden’s tax plan, if passed, could decrease the amount that traders and investment bankers take home from the roughly $30 billion Wall Street sets aside each year for bonuses. The plan seeks to expand taxes for annual incomes above $400,000 and to tax capital gains the same as regular income for top earners.
Johnson told companies they should still prepare for tax rates to increase next year regardless of who wins federal elections, given the U.S. government’s need to increase revenue. States including New York, New Jersey, Connecticut and California have also signaled rate increases, he added.