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British bankers brace themselves for another bonus bonanza

British bankers brace themselves for another bonus bonanza, according to latest survey

Key UK findings of the survey

57% of UK bankers and finance professionals expect their bonus will be higher this year than last

Nearly a fifth believe their bonus increase will be over 50% more

Amongst those British based bankers expecting a bonus, 51% believe the majority will be paid in cash

Half of British bankers and finance professionals anticipate no element of their bonus to be deferred

Only 28% are aware of their firm currently having a clawback policy

The anticipated bonus increases follow a year when the majority have already seen a base salary increase

In all, 70% expect their total compensation to be more this year than last.

Despite the growing spectre of renewed lay-offs in New York and London, the overwhelming majority of 5671 bankers and financial services professionals globally surveyed by expect to see a bonus increase this year.

In Hong Kong 71% of those questioned are anticipating a bonus rise of some kind, in Singapore 69%, and UK 57%. Meanwhile, broadly half of those bankers surveyed in North America and Australia are expecting a rise.

And for many, the expected bonus increase will be significant. In the UK, nearly one in five (17%) of all those surveyed believe their bonus will be over 50% higher than last year and in Hong Kong and Singapore 14-15% reckon they will be in line for an increase of over 50%. In the US, Germany and Australia, however, a more measured one in ten are anticipating a 50% rise.

And for banking industry regulators, the global survey results offer little comfort. Despite the recommendations to limit cash payments to less than 50% of a total bonus - irrespective of the bonus size - the survey results suggest this is yet to happen.

Of those expecting to receive a bonus who work in regulated areas of the banking industry in the UK, over half are expecting the greater part of their bonus to be paid in cash. And for those working in non regulated areas, over 80% in the UK expect more than 50% of this years bonus to be paid in cash.

In the US, Singapore and Hong Kong, the average expectation amongst those working in regulated areas of the banking industry who are expecting a bonus this year is that over three quarters of the bonus will be paid in cash.

Indeed, universally the survey indicates minimal awareness, or use, of clawbacks and deferred payments. For example, amongst those expecting to receive a bonus in the US, 70% believe no part of it will be deferred and in Germany, Australia, Singapore and Hong Kong, broadly two thirds reckon there will be no deferred element. In the UK, however, half of those expecting a bonus did expect it to be subject to deferred payments.

And in the area of clawbacks, less than one in five of those surveyed in the US, Germany, Australia and Hong Kong were aware of their firms currently operating a claw back policy. In the UK, 28% were aware of a clawback policy being in use.

James Bennett, Managing Director EMEA and APAC at, commented:
Despite the warnings on bonus payments from the Coalition, expectation levels in the City are running high this year which, if realized, will place bankers in the eye of a political storm once more. How banks balance staff expectations, the realities of their own underlying performances, and political pressures will ultimately determine the steps the British Government and the UK Prudential Regulatory Authority take to better manage future compensation in the sector.

The survey of 5671 bankers and finance professionals took place in the US, UK, Germany, Australia, Hong Kong and Singapore between 15-28 September 2010. 537 UK-based finance professionals took part in the survey.


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