Searching Smarter Podcast: Financial Services Pay Is Up in 2026. Here’s How to Take Advantage

Bryan Liou is a Managing Director at Johnson Associates, a compensation consulting firm focused exclusively on financial services. The firm advises organisations across asset management, hedge funds, private equity, banking, insurance, fintech and other areas of the industry on compensation benchmarking, incentive structures and pay strategy.

Chris Connors is a Managing Director at Johnson Associates. In the episode, Chris shares insights into 2026 incentive trends, the relationship between business performance and headcount, private equity compensation, and the growing competition for specialist talent.

Financial services firms entered 2026 with strong business performance supporting increased incentive compensation across several areas of the market.

Chris discusses how banks are currently leading this growth, with stronger revenues creating greater scope for incentive awards. However, the outlook varies across firms and sectors, meaning company performance and individual contribution remain important factors in determining compensation.

For professionals, this creates a more positive compensation environment, but headline trends should still be considered alongside individual performance, role, seniority and market conditions.

Financial services firms are increasingly demonstrating that revenue growth and headcount growth do not have to move together.

Chris explains that artificial intelligence is helping make areas such as back-office operations and client reporting more efficient, reducing the number of people required for work that was previously more labour-intensive. Firms can therefore continue to grow while maintaining or reducing headcount in some functions.

For hiring managers, this places greater focus on where new talent can make the biggest impact. For professionals, it means strong company performance does not necessarily translate into more vacancies, even when compensation for existing employees is rising.

Carried interest remains a major part of private equity compensation, but weaker exits and delayed realisations can create uncertainty around when that value will be paid.

As a result, annual compensation is becoming a more important retention tool. Chris explains that firms are paying closer attention to how they differentiate annual bonuses for their strongest performers when carry is delayed or may ultimately deliver less value than expected.

For employers, this increases the importance of rewarding performance in the near term rather than relying entirely on long-term incentives.

Competition for technology talent has intensified, particularly for professionals with advanced quantitative and research skills.

Bryan explains that artificial intelligence companies are increasingly competing directly with hedge funds and proprietary trading firms for the same talent. On the software engineering side, he describes offers from AI firms as significantly higher than financial services compensation. For the most sought-after quantitative professionals, some offers can reach several times their existing pay, often through large equity packages.

Financial services firms must therefore compete not only on headline compensation, but also on how that pay is structured. Hedge funds and proprietary trading firms can offer greater certainty through annual cash compensation, while AI companies may provide much larger potential equity upside.