Europe Bankers' Bonuses Slashed on Weaker Revenues
More than one in ten bankers and traders in the UK and Europe could receive no bonus this year, as banks slash their year-end pay-outs following weaker revenues.
Underperformers will miss out on the billions of pounds of bonuses doled out early next year, with bonus pools expected to be down as much as 20 to 30 percent at most big investment banks, according to Armstrong International, the European executive search firm.
“Compensation is being skewed more aggressively than ever,” said Matthew Osborne, a partner at Armstrong.
“Banks are saying: ‘Let’s pay only the top revenue generators and the lower-ranked staff, but not the mediocre people in the middle’.”
Banks are facing mounting pressure to curb bonuses – especially in the UK, where the coalition government has embarked on swingeing spending cuts.
Vince Cable, UK business secretary, on Sunday reiterated his threat that the sector could face additional taxes if it failed to exercise “real restraint” this bonus season, but he stopped short of outlining specific measures.
Many bankers are already braced for lower pay-outs following a volatile year and this month’s introduction of tough new European rules on pay.
Mid-ranking managing directors are expected to be the biggest victims, with some likely to see year-end compensation slashed by up to 50 percent, according to Armstrong.
Even top performers in banks’ fixed income and equities divisions will see pay trimmed by as much as 15 percent, while bankers who specialize in mergers and acquisitions can expect reductions of between 25 and 35 percent, the research says.