U.S. banks have now announced their bonuses for 2018 and Europeans are following in their wake. UBS is understood to have divulged its numbers last week; Credit Suisse is thought to be doing so this week. Some banks have paid better than others, but there is a point of commonality across the lot - directors are being squeezed.
Sitting between vice presidents (VPs) and managing directors (MDs) in the banking hierarchy, investment banking division (IBD) headhunters say directors are uniquely exposed as banks look for ways to cut costs.
One corporate finance headhunter, speaking anonymously, says the general rule of thumb in this year's bonus round has been that analysts, associates and VPs have been, "protected and looked after," that, "MDs have been paid well according to their performance," and that "directors are being selectively thrown to the wolves."
"Directors are the most vulnerable people in banks and they have very little optionality," says another corporate finance headhunter in London, also speaking off the record. "Every bank is having quiet conversations with their directors who aren't going to make MD and are suggesting that they start looking for something else."
Two headhunters said they had been approached by a large number of directors from Barclays, although the British bank is not understood to have a cost-cutting programme in place.
"The problem for directors is that they're not yet rainmakers and they're very expensive," says one senior London recruiter. "Unless you're very good and are clearly making money for the bank, there's no reason not to replace you with a cheaper VP. This has been the way of things for the past few years."
“Analysts are being kept happy. Directors are taking the pain,” says Logan Naidu, CEO of recruitment firm Dartmouth Partners.
The only good news is that after a strong fourth quarter in M&A (UBS and BAML excepted), banks and boutiques are said to be actively hiring. Long may it last. "Everyone feels that the market might be about to take a dowturn," says a headhunter.
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