City financiers expect 21% bonus rise for 2014, despite scandals
Most senior City staff forecast that bonuses for 2014 will be 21% higher than last year, a survey from recruitment firm Astbury Marsden reported on Monday. The majority of respondents said they would change employers if their bonuses were poor this year.
The survey showed that regulatory pressure to scale back giant City payouts, plus comments from lawmakers and the press regarding bankers’ abuses and their bankster-like activities, appear to have had no effect on senior financial executives’ bonus expectations.
Managing Directors expect their bonuses to increase to an average of £124,680 this year, compared to £102,930 in 2013. This means their bonuses would represent 60% of their salary versus 54% in 2013.
As the business environment improves, so do bonus expectations, Mr. Jackson explained. (Photo: Astbury Marsden)
Improved market conditions in the City this year have resulted in a significantly higher proportion of City employees at all levels expecting bonus hikes in 2014, Astbury Marsden informed.
In 2013, thirty-four percent of City workers expected a bonus rise, compared to 40% today. Sixty-six percent believe they will receive a bonus today, versus 61% last year.
Astbury Marsden Director, Adam Jackson, said:
“Business conditions in the City have improved significantly over the last year, which is now translating to rising bonus expectations. Despite shareholder and public pressure to limit bonuses and with the EU bonus cap now set to be introduced at the start of 2015, City staff clearly feel that their employers are in the position to reward them well.”
“But even though conditions have improved recently, some staff may find themselves disappointed in the upcoming bonus round.”
The survey found that people who work in Private Equity have the highest bonus increase expectations. They believe their bonuses this year will be (average) £145,625, i.e. 115% of average salary.
Most would jump ship after a poor bonus
More than half the respondents said they would change jobs if they were disappointed with this year’s bonus.
In 2013, forty-five percent said a poor bonus would make them change employer, compared to 54% today, the highest proportion since the survey began.
Twenty-seven percent said if they got a disappointing bonus they would seek out a promotion, compared to just 6% three years ago.
Mr. Jackson said:
“As bonuses expectations in the City rise, disgruntled City staff are no longer content to sit and hope for their contribution to be better recognized next year. They are increasingly looking at new opportunities if they don’t get the reward they think they deserve.”