Bonus season is around the corner, but what kind of payouts are in store for Tokyo’s bankers?
Martin Eastgate, a senior consultant at CDS, says early indications for international financial firms are fairly positive. Although 2010 hasn’t been the best of years, we should see a continued increase in bonuses.
“Trading volumes have been down during Q3 and Q4, principal investment activity has not reached the levels some had anticipated earlier in the year, and there has still been some restructuring and downsizing at some firms. What is constant though will be the focus on talent retention, and efforts are always made to provide satisfactory reward for high performers,” says Eastgate.
For some investment fund platforms in particular, Eastgate is expecting to see reasonable payouts, this is despite the number of transactions still being low and some noticeable restructuring, recapitalisation and sponsorship deals having occurred in Japan this year.
“As more capital comes back to the market these firms will need to attract and retain the best talent to make the most of the market whilst it is still close to the bottom. To this extent we have already seen some sign-on bonus being offered to entice people to move before the traditional January and February bonus season,” he says.
Of course, not every banker should have high expectations. Kevin Naylor, finance team leader at Wall Street Associates, says bonuses for middle and back office roles in Japan this year don’t look set to be especially appealing.
“Last year, many of the major global firms increased the percentage of total compensation represented by base salary, so most people will see comparatively smaller bonuses than they would like to,” says Naylor.