US bankers took home an average bonus that falls roughly in line with what they were paid over the previous five years, according to a new eFinancialCareers survey. Yet, while the average incentivised comp remained relatively static, this year’s bonus season is a story of the haves and the have-nots.
The average, or mean bonus for the 738 U.S. bankers who took part in our survey was nearly $73k, which isn’t far off from previous years. In 2011, the average bonus was $75k. A year earlier, it was just north of $71k. (No 2012 data was available).
But when looking at the median bonus – or the payment handed out to the banker squarely in the middle of the pack – a noticeable trend emerges. (The median is often used to measure skewed distributions, where the top or bottom percentile is out of norm and distorts the absolute average.)
The median bonus for 2013 was $15k, meaning half of all U.S. respondents took home a bonus equal to or lower than that figure. In contrast, the median bonus for 2011 was $25k. In the two previous years, the median was $20k and $21k, respectively. Over the last two years, the median bonus as a percentage of the mean has fallen from 33% to 21%.
So, while the average bonus remained roughly the same, a larger number of bankers took home a much smaller piece of the pie in 2013. Or looking at it another way, the top performers earned themselves a much larger percentage of the bonus pool.
The figures aren’t much of a surprise – they back up recent reports published by eFinancialCareers and other media outlets. Competition for top talent is at a recent high and banks are doing what is necessary to keep them happy. Middling performers, meanwhile, are getting the short end of the stick. Banks are essentially stealing from Peter to pay Paul – Peter’s more successful colleague.
There is a similar movement in the U.K., where the median bonus was also just 21% of the mean for 2013. It was 26% in 2011 and 30% in 2010. The wealth gap in banking is quickly widening…