Bank Bonuses 2016 Update: Analyst At Citigroup The Place To Be
With banks announcing bonuses every week since December, Emolument.com has been gathering more data on the trends seen so far this year, from bankers entering their new bonus details as soon as their ‘number’ is announced. Our analysis shows that managers are down this year to the benefit of graduates and junior managers.
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- Pressure on managers: VP and Directors’ bonuses have fallen from the previous bonus season announced in 2015, which had seen a tangible uptick from 2014. Previously, banks focussed on retaining MDs and deal-making staff. These institutions lost mid-ranking managers (VPs) who were burdened and frustrated by incoming regulation on pay, whose bonuses had been neglected
- Banks are planning for the future: bonuses are up substantially for Analysts and Associates, despite current market conditions which have seen banks such as Morgan Stanley cut large swathes of staff, especially on markets-related activities. Junior banking staff remuneration is usually mapped to a specific matrix with little room for leverage, but this year, banks have gone out of their way to keep junior staff happy.
- Doughnut or bonanza? With only a slight decrease in bonuses, the average bonus payment for MD hides the fact that their bonuses have been highly polarised this year with a large proportion of zeros at one end (or ‘doughnuts’) and very large pay packages going to key deal making MDs. Banks no longer shy away from zero bonuses, as losing anything other than key revenue generating staff is not a current concern. With base salaries having risen dramatically since 2008, disgruntled MDs are more than likely to stay put, even if only for their base salaries.
Based on 109 bonus entries from Front Office VPs working in the UK
Bank Bonuses 2016
- VP Bonuses are down! The latter half of 2015 has been a stressful period for bankers, as one bank after another announced poor results , accompanied by redundancies and bonus cuts. It has clearly impacted this year’s bonuses, as 7 out of 9 banks cut VP bonuses.
- Back to normal for US banks? It’s been a rough year for American banks with cuts across departments; firms such as JP Morgan & BAML, who used to give bonuses well above average (respectively £100,000 and £90,000 for VPs in 2015), have now realigned their bonus payments to match European banks.
- A dark horse: after doubling its profits in 2015, Citigroup is the only bank to have raised its VPs’ bonuses in 2016 . This trend is unlikely to last though, as Citi recently announced unexpectedly poor results in the first quarter of 2016 which will impact their bonus pool next season.