Bonus data is out today on executives working on Wall Street and the results are surprising. Compensation at major brokerage houses increased nearly 30% (after a record year last year) to its highest levels ever. This increase is due in part to a surge in M&A activity along with a strong IPO market and continued economic growth in the world's markets. These factors led to record profits reported by the Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns. Private equity and hedge funds also managed to do well with a widened salary range for managing directors of $700,000 to $7 million compared to a range of $1.5 million to $2.5 million just one year ago. There are indications that private equity and hedge funds are making riskier bets with record amounts of cash being poured into the funds, resulting in over $2.9 trillion in takeovers and a surge in loans, according to reports by Bloomberg and Private Equity Intelligence. Whether this activity continues or not remains to be seen; however, there are few signs now to indicate any slowdown in M&A activity by hedge funds and private equity.