For many firms, the cuts will continue this season and are likely to be largely concentrated in the trading desks where returns are slower and the risks are higher.
"There are going to be haves and have-nots this year," said Brad Hintz, an analyst at Sanford C. Bernstein.
Many of those who will see fatter paychecks will be employees on the investment banking side, where business can be lucrative and the pipeline for mergers and acquisitions is looking strong.
"How many mergers and acquisitions you have closed at the year-end will determine whether you are a have or a have-not," Mr. Hintz added.
In recent days, Wall Street firms, including Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley, all reported a sharp squeeze in fixed-income trading revenue as investors held tight to their positions in anticipation of a decision by the Federal Reserve to pare back its $85 billion-a-month bond-buying program.
The effect was most felt at Goldman Sachs, which said revenue dropped 44 percent in its bond, currency and commodity trading desk, prompting it to sharply reduce its pay and bonus pot.
The challenge in the next quarter will be for Wall Street to battle any lingering effects of a political impasse in Washington, which led to a 16-day partial government shutdown.
Ruth Porat, Morgan Stanley's chief financial officer, said last week that the biggest headwind for the economy and the markets would be continuing political uncertainty. For Morgan Stanley, the biggest worry is that the shutdown will hurt merger and acquisition deals that are still in the works.
Alan Johnson, managing director of Johnson Associates, said he also expected compensation as a percentage of total revenue to be down slightly this year across Wall Street firms.
"These banks are no longer the highest payers – we're no longer talking about the masters of the universe," Mr. Johnson said.