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Wall Street Bonuses Dip Year/Year, Fatter Bonus is No Guarantee of Satisfaction

New York, NY - January 25, 2011  Average Wall Street bonuses dropped five percent year/year, according to early reporting of Wall Street professionals who are bonus-eligible and know the amount of their annual bonus.  As regulators, governments and banks across the globe continue to scrutinize compensation, reported individual bonuses ranged from $0 to $5 million, demonstrating that pay-for-performance remains intact on Wall Street. 

 

The majority (56%) of financial markets professionals who saw bonuses in both years took home more than the previous year, while nearly one in five (19%) saw their bonuses decline year/year.  Eight percent of bonus-eligible Wall Street professionals took home no bonus this year.    

 

Changing firms is no guarantee of a higher bonus. Fifteen percent of respondents indicated switching employers was the number one reason their bonuses decreased.   A similar number (12%) said the opposite was true – switching firms was the primary reason for the rise in their bonuses.

 

Still, more than one-third (37%) of Wall Street professionals who responded are looking to change firms, with another eight percent are looking for new positions within their existing firms.

 

“It’s become a cliché to talk about retention issues in the first quarter of the year post-bonuses.  But that doesn’t mean it isn’t a significant issue this year, after financial markets professionals have been stretched over the last two years and recruitment activity continues to strengthen,” said Constance Melrose, Managing Director, eFinancialCareers North America.  “The bottom line is there are more opportunities this year for Wall Street professionals to make a career move, and that’s true on the sell-side and more recently the buy-side.  When the largest and most sophisticated financial institutions are putting money toward retention programs, it’s no red herring.”

 

Average bonuses were higher year/year for individuals specializing in investment banking, foreign exchange, derivatives, research and private equity.  Fund management, risk management and commodities bonuses were on average lower by comparison.

 

Half of Wall Street professionals were satisfied with their bonus amount.  For those who were dissatisfied (34%), their bonuses were barely one-third of their more satisfied colleagues.  Looking more closely at those who received more or less, nearly two-thirds (65%) of financial markets professionals that received a bonus increase were satisfied, while 19 percent were dissatisfied.  For those with a bonus decrease, just 19 percent were content, while 68 percent were dissatisfied. 

 


Global Comparison

 

Average bonuses for Asia-based financial markets professionals showed the largest year/year increase at 22 percent.  By comparison, average bonuses in the U.K. gained five percent, while average bonuses in the U.S. declined five percent. 

 

Across the board, a majority of financial markets professionals in each of the regions surveyed said their bonuses at least met their expectations.  And satisfaction levels are comparatively high regarding bonuses received this year.  In the U.S. and U.K. only one-third were displeased with their bonus received; in Asia, a quarter. However, in the U.K. and Asia, over 40 percent of respondents said they are looking to change firms in 2011 with a further eight percent in the U.K. and 17 percent in Asia saying they are looking to change positions within their current firm.

 

Not surprisingly, across all these markets bonuses being paid to front office financial professionals are typically three times higher than those being paid to colleagues in the middle and back offices. 

 

About the Survey

 

The eFinancialCareers Global Bonus Survey took place in the U.S., U.K., Australia, Hong Kong and Singapore between January 3 – January 12, 2011, with 2,511 financial markets professionals who are bonus-eligible and know the amount of their annual bonus responding, including 1,009 from the U.S.

 

Table 1:  How did your 2010 bonus compare to the previous year’s bonus?

(U.S. respondents only)

 

Increased                    56%

Decreased                  19%

Stayed the Same        25%

 

Table 2:  What was the primary reason your bonus changed versus last year? (U.S. respondents only)

                                                                  Increased       Decreased           

Personal Performance                                   40%                   3%

Department Performance                                5%                   5%

Firm Performance                                          31%                 53%

Changed Positions within Employer                 5%                   4%

Changed Employers                                       12%                 15%

Pay Structure Changed                                    5%                 13%

Other                                                                 2%                   7%

 

Table 3:  Do you expect to change jobs in 2011?

                                                                                                U.S.     U.K.     Asia

Yes, expect to change positions within my current firm          8%     8%     17%

Yes, expect to change firms                                                   37%    41%     42%

No, do not expect to change jobs                                           32%    34%     23%

Not sure                                                                                  23%    16%     18%

 


Table 4:  How satisfied are you with your 2010 bonus?

 

 

                                                            U.S.     U.K      Asia   

Satisfied                                              50%     46%     54%    

Neither Satisfied or Dissatisfied          16%     21%     19%        

Dissatisfied                                          34%     34%     26%

 

Note:  Results may not total 100% due to rounding.

                           

About eFinancialCareers

 

eFinancialCareers, a Dice Holdings, Inc. service, is the leading global career site network for professionals working in the investment banking, asset management and securities industries. The website provides financial services professionals with job opportunities, job market news and analysis, salary surveys and career advice.  Recruiters and employers can post jobs targeting specific sectors within the financial services industry, both buy-side and sell-side, and can search the resume database for highly qualified and specialized professionals. eFinancialCareers has a network of co-branded career sites with industry-leading trade publications and offers local websites in 18 markets and five languages primarily across North America, Europe, the Middle East and Asia-Pacific.  www.eFinancialCareers.com

 

 

Media Contacts:

Jennifer Bewley

212-448-8288

efcmedia@efinancialcareers.com

 

Kona Luseni

Makovsky + Company

212-508-9684

kluseni@makovsky.com