BANKERS’ BONUSES CONTINUE TO RISE IN THE UK

BANKERS’ BONUSES CONTINUE TO RISE IN THE UK

eFinancialCareers’ Global Bonus Survey Results

Key eFinancialCareers UK findings

49% of bankers and finance professionals have received a bonus increase this year;

For those receiving an increase, the average bonus for front office professionals is £84,409;

For top performers, bonuses are accounting for up to 40% of their total compensation this year;

Across the sector, bonuses have increased by 5%, 25% having experienced a bonus decrease;

Front office professionals at Government owned banks are seeing significantly less than colleagues at other banks in terms of bonuses.

As Governments and regulators across the globe attempt to rein in bonuses in the banking sector, the latest survey of 2511 financial professionals in the US, UK, Hong Kong, Singapore and Australia show bonus levels in London to be amongst the highest of the financial centres surveyed.

In the UK, of the 654 bankers and financial professionals surveyed by eFinancialCareers.com, 49% reported a bonus increase, with only 25% saying it had decreased. And across the board, bonuses in the sector are up by 5% in the UK, with the highest average bonuses being paid to hedge fund and trading specialists. By contrast, in the US, average bonuses are down by 5%.

And amongst those UK bankers and financial professionals who have received an increase, the average bonus payment being received amongst front office professionals is £84,409, with middle office professionals receiving £31,705, and back office workers £18,895 according to the eFinancialCareers survey.

By comparison, in Hong Kong, Singapore and Australia, amongst the 848 surveyed, while bonuses have increased for 59% and decreased for 16%, the size of average bonus payments is typically lower than the UK. Meanwhile, in the US, while 56% of those surveyed in the US said their bonuses are larger this year and 19% lower, overall average bonuses are down 5%.

Across all markets, though, the bonuses being paid to financial professionals in the front office are typically over three times higher than those being paid to those in the middle and back office.

When then looking at bonuses as a percentage of overall compensation, for those in the UK who have seen a bonus increase, the bonus element accounts on average for no more than 32% of their overall compensation, compared to 28% in the US and Asia respectively. However, for top sell-side performers in the UK who have seen a bonus increase – bonuses have accounted for up to 40% of total compensation, up from no more than 32% last year.

Further, the majority of respondents in the UK and Asia said they are still receiving all of their bonuses in cash with few (less than 10% in the UK) having had more than 25% of their bonus payment deferred. 20% in the UK also claimed they have Guaranteed Bonuses.

Front office working at the UK’s Government owned banks, however, are only seeing around a third of what their colleagues at bulge bracket firms are receiving in bonuses this year.

Across the board, though, satisfaction levels are comparatively high regarding bonuses received this year. In the UK and USA, a third were displeased with their bonus received; in Asia, only a quarter. However, in the UK and Asia, over 40% of respondents said they are looking to change firms in 2011 with a further 8% in the UK and 17% in Asia saying they are looking to change positions within their current firm.

James Bennett, Managing Director EMEA and APAC at eFinancialCareers.com, said,

“Retention of key staff is going to be a dominant theme during 2011 as financial institutions tackle the challenge of meeting compensation guidelines set by Regulators and the earnings’ expectations of employees. We see this issue being particularly acute amongst younger staff as our data shows that the largest bonuses are typically being paid out to those professionals with 15 years or more experience; less experienced staff have typically received significantly lower bonuses.”

The survey of 2511 bankers and financial professionals took place between 3-12 January 2011.