Bonuses for capital markets bankers are set to tumble by 40% this year as deal activity slumps, while a flurry of salary hikes over the past 12 months will eat into variable pay, according to a top Wall Street compensation consultant.

Dealmakers raising funds on capital markets likely to see the biggest drop in bonuses this year, according to the latest survey by Johnson Associates, while most business lines are set for a sharp decline compared to 2021, when deal fees surged to a record $130bn.