Stock options under water

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It's been a rough six months for Aussie banks, and one leading stockbroker says more losses could be in store.

Since August last year, shares in NAB have plummeted 26%, ANZ shareholders have lost 23%, and Babcock & Brown and Macquarie shares have also taken decent hits.

Grant Williams, a director of Sydney-based stockbroker Reynolds, says without a crystal ball it's difficult to say for sure where share prices are headed. "We've had a good period of readjustment, but the banks could revisit their lows," he warns. "However, the Australian banks seem to be in a lot better shape than their American or European counterparts."

This news is sure to create some jitters, especially among those bankers who have as much as 70% of their bonuses tied to stocks or stock options, says Luke Heath, chief executive of recruitment firm Chandler Heath. "They'll notice the losses," he predicts.

Share market losses and skinny bonuses have also prompted plenty of high-calibre candidates to consider their career options. "There have been a few firms unable to pay the [big] bonuses bankers have previously enjoyed. Others are also concerned there's going to be more than one underperforming year. It's prompting people to look elsewhere."

Recruiter John Coles, CEO of Executive Group International, disagrees, and says defection activity is more dribble than deluge. "Everyone realises the next one year to 18 months will be a little tricky. It's not the time to go jumping around even though [bankers] are getting lower than expected bonuses."

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