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Cash is still king in the City, but bonuses slide for investment bankers

Bonus

Enjoy it while it lasts – as the EU secures a deal to push through bonus caps to two times salary, variable compensation for financial services professionals in the City has broadly remained stable this year, and the majority of people received it all in cash.

The eFinancialCareers UK bonus survey, which polled over 600 City financial professionals, suggests that bonuses fell by an average of just 2% this year, with front office compensation shrinking by just 1%. This is in stark contrast to Wall Street, where bonuses for front office employees shrunk by an average of nearly 38% this year, according to our US survey.

However, as the table below looking at the individual sectors shows, core investment banking functions have seen a big slide in average bonus payments. Aside from commodities trading, which includes both banks and independent trading houses, and equities sales, trading and research, most front office functions saw a significant decline in bonus payments.

M&A bankers’ variable comp shrunk from an average of £60k to £42.2k, FX from £107.6k to £75k and credit roles from nearly £110k in 2011 to £82.1k this year. Debt and equity capital market bankers also received smaller average bonuses.

Private equity professionals received a big jump from nearly £70k on average to £197.8k and private banking and buy-side professionals all received bigger bonuses this year, the survey suggests.

While pressure mounts for banks to pay an increasing amount of bonuses in deferred equity, outside of the regulated employees and executive suite, our survey suggests that cash is still king. Nearly 70% of respondents received all of their bonus in cash.

Average bonus by sector:

Bonus-sector2

Comments (2)

Comments
  1. This data looks very odd. I presume the same 600 people were not interviewed in 2011 and 2012, which makes comparison somewhat pointless unless you otherwise control for different job functions, which I presume hasn’t been done.

    Why bother posting data with such an obvious flaw?

  2. M&A numbers are very very light. Look like 3rd year analyst up to 2nd year associate at best.

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