• Wall Street is set to see the biggest bonus increases since the Great Recession after a busy and profitable 2021, according to a report from pay consultancy Johnson Associates.
• Overall bonuses for investment banking underwriters are forecast to jump 30% to 35% from the year prior, while investment banking advisors and equities traders can expect a 20% to 25% year-over-year bonus increase.
• A sharp rebound in business activity this year has translated to unprecedented workloads for Wall Street professionals — and a competitive job market as companies fight to retain top talent and nab new hires.

Wall Street is set to see the biggest bonus increases since the Great Recession after a busy and profitable 2021, according to a report from pay consultancy Johnson Associates.

Booming deal activity, a hot IPO market and climbing equities mean bankers and traders are in line for outsized performance-based compensation, the report released Tuesday said.

But the sharp rebound in business activity this year has translated to unprecedented workloads for Wall Street professionals — and a competitive job market as companies prepare to shell out a premium to retain top talent and nab new hires.

Firms are "very concerned about turnover, even though pay is going to be up significantly," Johnson Associates managing director Alan Johnson told CNBC.

Johnson Associates used public data from banks and asset management firms, along with proprietary insights from clients, to calculate the projected year-end incentives on a head-count-adjusted basis. Some investment banks, including Goldman Sachs, disclose how much management has set aside for employee compensation in quarterly earnings reports.

Overall bonuses for investment banking underwriters are forecast to jump 30% to 35% from the year prior. For investment banking advisors and equities traders, that year-over-year rise is estimated at 20% to 25%. Johnson Associates also predicts bonuses for private equity, asset management and hedge fund roles will see double-digit increases.

(Source: Johnson Associates)

This year's expected increases are the largest since 2009, when several business areas were projected to receive bonuses that were 30% to 60% higher than the previous year, according to Johnson Associates.

The estimated record bonuses, which include cash and equity awards, come after a Covid pandemic-ridden 2020 saw activity slow and year-end incentives decline for many bankers, although traders benefited from strong trading volumes fueled by the Federal Reserve's steps to calm markets.

In contrast, "the business results this year have been outstanding," Johnson said.

Business activity is expected to remain strong and keep incentives elevated next year, though growth will likely slow, according to Johnson.

"I don't think [bonuses] are going to go up as much next year. … I think this was a spurt," he said. "But the view is '22 will be a really good year."

Not only are bonuses on the rise, but base salaries are set to climb, too. While Wall Street has long preferred to compensate its workers with performance-based year-end bonuses, the competitive labor market landscape and inflation are pushing base pay higher.

After heightened attention on junior banker culture this year, firms across the Street hiked pay floors with Goldman Sachs raising salaries for their entry-level investment banking roles from $85,000 to $110,000.

Base salaries across the financial services industry could rise well more than 3%, and even upward of 7%, according to Johnson.

"Base salaries are more important than ever," he said.

— CNBC's Hugh Son contributed to this report.