Wall Street Bonuses to Decline

The declines still leave employees at firms such as Goldman Sachs Group Inc., where the average worker earned $350,000 last year, among the best-paid Americans. But they highlight the challenges facing banks--and the dwindling perks of working at one.

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The bonus pool for banks has dwindled more than 30% since 2009, when record payouts against the backdrop of a worsening economy heaped public and political scorn on big banks.

Since then, regulation has crimped banks' trading profits, while tepid global growth has hurt their lending and capital-raising arms. Meanwhile, a shift toward simpler, low-fee investment models has reined in the hedge funds that once paid big fees to banks' stock-trading desks.

The six largest U.S. banks have made less through the first nine months of 2016 than they did last year. Compensation as a percentage of revenue has declined as well at most firms, meaning employees are getting a smaller slice of a shrinking pie.

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Star performers are still "making a ton of money, but not two tons," and pay is falling faster for those further down, said Mr. Johnson, who relies on public filings, analyst reports and conversations with client banks to make his estimates.