The sweet spot for investment banking bonuses in 2014

eFC logo

Where in the world are investment banks pandering to their employees, offering them incentives of larger salaries and the prospect of a larger bonus? The sweet spot to work currently in investment banking globally is in the UK at associate level.

More bankers with 3-5 years’ experience in the UK are expecting a larger bonus than anywhere else in the world, according to the latest eFinancialCareers bonus expectations survey, which took in responses from nearly 3,000 financial services professionals globally.

75% expect a bigger bonus this year, the largest proportion of any group, followed by 69% of bankers with 1-2 years’ experience in the City. Optimism is similarly present among the junior ranks on Wall Street, with 65% of both those with 1-2 years and 3-5 years’ experience expecting a bigger bonus this year. In Singapore, those in senior positions think they are more likely to get a big bonus this year, with the largest proportion of respondents – 51% - having more than 11 years in the industry.

Junior bankers are, of course, hot stuff with investment banks attempting to deal with a combination of workload pressure on analyst and associates and their increasing propensity to leave banking for the buy-side. Goldman Sachs, JPMorgan, Citi, Bank of America and Morgan Stanley all hiked up base pay for their junior staff, by up to 20%, and clearly analysts and associates are expecting to be rewarded handsomely in this year’s bonus round.

Our figures suggest that they’re expecting more of the same this year. 68-73% of junior bankers in the UK and 67-75% in the US said they had a pay rise this year, the largest proportion of which received 11-30%. What’s more, 60% said they’re anticipating a pay rise again over the next six months, but the majority have more modest expectations of up to 10%.

The largest proportion of UK-based bankers with 1-5 years’ experience (34-44%) said they were expecting an 11-30% bonus uptick this year, while 35-38% of those on Wall Street said the same.

Interestingly, however, while expectations of a large uplift were tapered in the senior ranks in the UK – a lot of banks, notably Barclays, are cutting at director and managing director level after all – optimism continues into the upper ranks on Wall Street. 41% of those with 11-14 years’ industry experience said they were expecting 11-30% more, while 35% of industry veterans with more than 15 years’ experience anticipated the same uplift.

Related articles