Bonus City pay-outs expected
Top bankers and traders are gearing up for bonus pay-outs of up to 30% following a successful year for the financial markets, a report showed today.
The report by City head-hunters Armstrong International came after news that around 4,200 City workers will receive a bonus of more than £1m (€1.47m) this year following high levels of merger and acquisition activity.
Square Mile bonuses will grow 18% to a record £8.8bn (€12.9bn) this year, the Centre for Economics and Business Research (CEBR) said last week.
Armstrong said there would be “significant payouts” in most areas thanks to strong performance in equity markets as companies attempt to cling onto key staff.
Top performers in high margin growth areas are likely to see the top end of the 10% to 30% forecasted bonus growth, but others may be left disappointed.
Matthew Osborne, partner at Armstrong International, said: “The trend in 2006 will continue to see outperforming bankers in key areas receive the lion’s share of the bonus pool. Whilst the overall bonus pool is likely to be up, this is by no means a guarantee that everyone will benefit equally.
“Management are more acutely aware of which bankers own relationships and which ones merely sit on a strong franchise. Subsequently, some bankers may well see a reduction in bonus just to subsidise the higher performing members of their own teams.”
Earlier this year, a report from pay specialist Independent Remuneration Solutions (IRS) revealed that leading executives of the UK’s biggest companies now earn £3.3m (€4.8m) a year on average, thanks to large bonuses and performance-related incentive plans.
Bumper City bonuses have been blamed for pushing up house prices in the capital.
