Bonuses for top bankers to rise more than 40% to €200,000

Managing directors at banks in London are expecting a 44% rise in bonuses for 2013 even as European authorities seek to scale back compensation, according to a recruiter’s survey.

The average bonus for MDs may increase to £166,955 (€197,712) from £115,618 a year earlier, Astbury Marsden said in an emailed statement. That’s more than double their average salary, up from 88% in 2012, the recruitment firm said.

“Despite pressure to keep a lid on bonuses, as the economy recovers and bank profits start to return, it’s not unreasonable that bonus expectations also rise,” Mark Cameron, chief operating officer at Astbury Marsden in London, said.

“Although prospects have improved, some may find themselves disappointed this year.”

The EU brokered a deal in February to outlaw banker bonuses that are more than twice fixed pay, a move legislators said would prevent excessive payouts and curb risk-taking. In September, the UK went to the EU’s highest court to challenge the caps but that case has yet to be decided.

The European Banking Authority softened its stance on bonuses somewhat, stating on Dec 13 that banks will be able to ask national regulators to exempt staff earning as much as €1m from rules that cap bonuses at twice fixed pay.

London’s financial services firms are also offering larger pay packages to lure senior staff to change employers, Astbury Marsden said.

Managing-director level employees received a 29% addition to their fixed pay when they moved jobs, compared with 15% in 2012, the firm said.

Britain was home to 2,188 investment bankers earning more than €1m in 2012, the largest share in the EU, while Spain had 37, the London-based EBA, set up in 2011 to harmonise banking rules in the EU, said in a survey last month. France and Germany had 117 and 100, respectively.

Astbury Marsden surveyed 1,509 investment bankers in London in October.

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