City of London workers will enjoy an increase in base pay this year but will see their bonuses cut by 22 per cent, according to a survey.
Financial professionals in the Square Mile are expecting an average bonus payment of £19,920 this year, down from the £25,570 reward they received last year, financial services recruitment firm Astbury Marsden found. About 12 per cent of City workers are not expecting a bonus for 2011, but staff at managing director level are looking forward to an average payout of £166,000, the survey found.
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However, City staff will be cheered by an increase in the average base salary from £73,050 in 2010 to £83,000 this year.
Astbury Marsden chief operating officer Mark Cameron said: “Just over half of City employees that we recently polled said they were unsure whether they were getting a bonus or not. That is a real shift in sentiment on bonuses from previous years. In the pre-credit crunch days bonuses were talked about in many multiples of base pay – this year the expectations are for fractions of salary.”
Staff have been laid off at investment banks around the world as they look to cut costs in turbulent economic conditions caused by Europe’s sovereign debt crisis. But the job cuts may have helped sustain the level of bonuses paid in the City, with the bonus pool split between fewer staff, according Cameron.
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He continued: “The recent redundancy programmes may have helped bonuses slightly as they have the side-effect of reducing the number of team members amongst whom the bonus pool needs to be shared. However, the hit to trading and advisory revenues since the start of the summer have left few in doubt over the direction of bonuses. Line managers have also made a big effort to try and control their staff’s expectations.”
“That does seem to have worked as last year staff expected bonuses worth an average of 35 per cent of base salaries. However, despite the ongoing redundancies in the City it is inevitable that there will still be many City workers disgruntled with their bonuses in the new year.”
Staff in mergers and acquisitions teams have the highest bonus expectations, according to the survey, despite a drop in the number of transactions this year. Investment bankers in these departments believe they will receive an average bonus of 60 per cent of their base salary for 2011.
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