US corporate finance bonuses rise

They said successful relationship managers would be among those making the biggest bonus gains, rather than execution specialists.

Peter Gonye, co-head investment banking practice at Spencer Stuart, said: 'You may well find remuneration for real producers could be 30% to 50% higher than last year, but support staff will be closer to 20%.'

Gary Goldstein, chief executive of the Whitney Group, said the gap between the most valued staff and the rest would be very wide, with many employees likely to be in the 20% bracket. Employees who brought in a lot of business would receive much bigger increases.

He said the outlook for job seekers was improving gradually. "My experience with Wall Street is that in coming out of a downturn they're reluctant to hire unless there is absolute visibility for their business.

"But at the moment everyone is looking for very senior relationship people, mostly in the M&A and equity areas of corporate finance, the higher margin businesses."

Gonye said there had already been some demand for senior corporate finance specialists in health care, consumer products and energy.

Gary James, a director at Michael Page, said: "More deals are being written but at the present time the need to recruit people is not critical.

"The banks have the capacity internally to cope, but obviously if activity continues at the same rate they may have to reassess."

Andrea de Cholnoky, co-head investment banking practice at Spencer Stuart, said: "In a nutshell, the business environment is improving, so hiring is increasing.

"But many firms didn't cut down to the bare minimum before, so they are still somewhat overstaffed. Hiring is more of a trickle really."

Some headhunters said a number of employees felt they had not been particularly well-treated in the last few years. These would be among the most eager to move.

Completed M&A deal in the US for the first nine months of 2003 totalled just $298bn, compared with $556bn for all of 2002, according to Thomson Financial.

Both figures are a far cry from the $1.8 trillion completed in 2000. There have been signs of an upturn towards the end of 2003, but not enough to persuade banks to sharply increase staff numbers.