The battle for young banking talent appears to be intensifying. That’s the message from the 2016 London bonus round, with those on the bottom rungs of the bank career ladder – analysts and associates – bagging big awards as their superiors suffer double-digit declines.
Average bonuses were up 150% for analysts but down 33% for directors, according to the salary benchmarking website Emolument.com.
For associates, bonuses were up 21% whereas for vice presidents they were down 24%.
Banks feel obliged to pay younger employees more to compensate for working in a scandal-tainted industry with increasingly burdensome compliance procedures, according to Alice Leguay, co-founder and chief operating officer of Emolument.
She said: “More than doubling bonuses for juniors might not solve the issue long term though as this generation of young talent is intent on having a purpose in their career. This is putting pressure on banks to take a much-needed hard look at their culture, transparency and capacity to adapt to a fintech economy.”
The average bonus for managing directors fell 8%, although this masks a big difference between large bonus increases for MDs regarded as essential dealmakers and zero – a “doughnut” – for those who failed to bring home the bacon.
Some of the biggest cuts were at US banks, traditionally the most generous payers, which have now “realigned” their awards to match European rivals, according to Emolument. While in percentage terms the increases and cuts are striking, in cash terms it is still not hard to tell an MD from an analyst: their average bonuses were £275,000 and £15,000 respectively.