Local investment bankers face a fourth year of weak bonuses in 2014, with most set to get similar payments to last year when the bonus round kicks off on Thursday, The Australian Financial Review reports.
As US firms start reporting their fourth-quarter results on Tuesday night Australian time, local chiefs will be preparing to tell employees whether their performance earned them more for 2013. For many it will mark the fourth year of subdued payouts.
Morgan Stanley’s Australian staff are informed of their bonuses on Thursday, while Citigroup’s local employees are likely to be told on the same or following day. Goldman Sachs intends to tell its Australian employees on Friday, while Bank of America Merrill Lynch and JPMorgan are expected to inform staff in the week commencing January 20.
Most senior bankers contacted by The Australian Financial Review said the bonus season would be broadly muted bar some pockets of strength in particular divisions such as infrastructure, while junior bankers and analysts are expected to enjoy some respite with increases to their bonuses and total compensation.
“Our juniors are all going pretty well,” the head of one bank said. “It is heavily performance based but most juniors will see an increase, while on average senior staff will be flat or down.”
It is not all bad news, as one senior banker said top performing associates and analysts may earn as much as 70 per cent of their base salary as a bonus. As bonuses are typically paid in US dollars, many employees will also benefit from a stronger greenback.
Compensation for bankers, traders , and sales and research staff is assessed on divisional, geographic and individual performance by banking bosses who aim to preserve the bonus pool to reward top performers.
But for most senior bankers, a focus on reducing compensation by regulators on Wall Street and Europe will set the tone for the year.
“Doughnut” – or zero – bonuses will again haunt some bankers this year, but with limited hiring in Australia there are few options for change.
The fourth quarter results will have a large bearing on bonus payments to local operations, and provide analysts with more insight into the earnings of Sydney-based Macquarie Group. It rules its full-year off on March 31.
Read the full article in The Australian Financial Review