Now that even Barack Obama seems to have abandoned his earlier “bonus rage” and acknowledged - if not welcomed – bankers’ multi-million dollar bonus payouts as part of America’s “free market system”, it should be all okay then.
Presumably nobody’s going to get excited to learn that bankers in London have received average bonus increases of 40 per cent this year and most have also received a jump in base salary.
That’s according to a new survey by EFinancialCareers, a career website network for financial workers, that indicates in fairly bald terms that attempts to restrain payouts are failing.
The survey found that 57 per cent of 694 UK banking and finance professionals quizzed about their 2009 payouts said bonuses had risen on average by more than 100 per cent — taking the industry rise to two-fifths of 2008 payouts.
Nearly two-thirds of those asked said they had also received a base salary rise 26 per cent on average last year.
Employees in private banking, trading and debt/fixed income received the highest bonuses, while those in risk management, equity capital markets and commodities saw the largest year-on-year increase in payouts to more than double the (relatively) depressed levels of 2008, eFinancialCareers said.
As Reuters reminds us on Friday, the UK has attempted to halt a bonus culture blamed for helping sow the seeds of the credit crisis by imposing a 50 per cent “super bonus tax” on bank bonuses over £25,000, banning long-term guaranteed bonuses and urging banks to spread bonuses over three years to discourage short-term decision-making.
But interestingly, the survey respondents noted little change in how bonuses had been structured. Almost 70 per cent said they received all their bonus in cash, 19 per cent said a part was deferred and 3 per cent said some could be clawed back — similar to 2008.
This is even more striking: despite the salary and bonus rises, almost half of the survey respondents said they were dissatisfied with their award amid concerns over an increasingly harsh tax regime for high earners, and 41 per cent said they “intended to seek work outside the UK” because of mounting taxes.
Helpfully, alongside the survey results, eFinancialCareers gives us an article on bank-by-bank salary increases, as well as a nifty collation of all that’s currently known – in the public domain - on 2009 compensation, bank by bank. The list is long (and not in alphabetical order), so for quick consumption, the notable points are:
• In dollar terms, last year’s highest payer per head was Goldman ($498k), followed by Deutsche ($478k) and Credit Suisse ($419k). BofA Merrill is rumoured have paid $400k. UBS was the straggler, with average comp of $315k.
• Only JP Morgan paid more per head in 2009 than in 2007.
• UBS was least able to afford its investment bankers: its 2009 investment banking compensation ratio was 81%.
• Deutsche Bank was most able to afford its investment bankers: its 2009 corporate and investment banking compensation ratio was 26%.
And finally, regarding the inevitable lists of big bonus earners that emerge around this time of year, we realised that it’s not just us scratching our heads when we read the New York Times’ report this week about how Wall Street’s biggest bonuses are going to not-so-big names. As the newspaper noted this week:
“The list of the biggest earners in finance usually reads like a Who’s Who of Wall Street. But these days, it reads more like a Who’s That?“
Related links:
More bonus neurosis: Thain and how times have changed FT Alphaville
Bonus neurosis, revisited: Mine’s bigger than yours – FTAlphaville
Media-fuelled Goldman bonus neurosis – FTAlphaville