- Bank of America plans to boost its 2025 investment banking bonus pool, with top dealmakers potentially getting around 20 % increases while mid-level bankers see flat or modest changes.
- The move follows a roughly 10 % rise in the 2024 bonus pool and comes amid strong growth in BofA’s investment banking revenues and its third-place global fee ranking.
- Surging deal activity, especially in mega-deals and underwriting, plus supportive market conditions, are driving larger pay for high performers across Wall Street.
- BofA is using targeted pay and hiring to gain 50–100 basis points of investment banking fee share over 3–5 years, but faces risks if deal volumes or markets weaken.
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BofA’s compensation outlook for its investment banking division shows a differentiated bonus scale: modest or flat increases for mid-level bankers, but top performers expected to see promotions in bonus size (≈ 20 %). This contrasts with 2024, when average bonuses rose about 10 % across the board. [2] The increase in dealmaking—particularly in M&A megadeals and underwriting—has contributed substantially to this trend; BofA secured advisory fees from high-value transactions such as the $85 billion Norfolk Southern-Union Pacific merger, earning roughly $130 million in fees. [2]
The shift in bonus distributions reflects broader Wall Street trends. Market volatility, rising equity valuations, increased capital markets activity, and rate environment changes are allowing banks to unlock more fees and profit pools. According to Johnson Associates, bonuses for advisory and underwriting roles are expected to rise by 10-15 %, with even larger increases for trading and sales roles. [5] BofA appears to be aligning with these industry movements but may lag peers for mid-level and non-top performers.
From a strategic standpoint, the compensation boost serves multiple purposes: retaining and rewarding top talent amid intense competition; reinforcing BofA’s ambition to capture more investment banking fee share; and leveraging strong deal flow to drive performance. However, this model poses risks: if deal volumes drop, or if macroeconomic headwinds intensify (interest rates, regulatory risks), the bank’s elevated compensation expectations could pressure margins. Also, flat bonuses for mid-level staff may spark internal discontent or turnover if perceived as unequal.
Key questions remain: will BofA sustain or grow its deal pipeline into 2025 and beyond? How will its competitors respond in terms of pay and strategy? And how will regulatory, interest rate, or market shifts shape investment banking revenues—and thus bonus-pools—in the medium term?
Supporting Notes
- Top dealmakers at BofA may receive bonus increases of about 20 % in year-end 2025 compensation, whereas payouts for mid-level performers could be flat. [2]
- In 2024, BofA raised the average bonus pool for investment bankers by about 10 % compared to 2023.
- BofA Securities ranked third globally in investment banking fees during Q4 2024, earning approximately $1.4 billion in revenue, up from $958 million in the same period in 2023.
- BofA aims to increase its share of investment banking fees by 50 to 100 basis points over the next 3–5 years through participation in mega-deals (size $5 billion+), hiring in advisory, and expanding in middle-market deals. [2]
- The backdrop of elevated industry bonus expectations: compensation consultancy Johnson Associates projects investment banking and M&A advisory bonuses to rise between 10-15 %, with equity/trading desks seeing 15-25 % increases. [5]
- Broader revenue drivers include surging deal volume and market volatility; whereas BofA is expecting markets business revenues to increase by high single-digit percentage to 10 % in the fourth quarter. [2]
Sources
- [1] www.reuters.com (Reuters) — 2025-01-09
- [2] www.reuters.com (Reuters) — 2025-12-19
- [5] www.reuters.com (Reuters) — 2025-11-05