Lower bonuses, happier bankers

A new survey suggests the 2004 investment banking bonus round was unimpressive, but bonus recipients were relatively happy nonetheless.

The survey of 241 banking staff by Morgan McKinley, the middle and back office recruiter, found average bonuses rose a meagre 1.2% in the City of London in the last 12 months, to 15,217.

Support and administrative staff fared worst of all, with over half receiving no bonus at all.

Bankers nevertheless appeared surprisingly content with the outcome. More than half of respondents─ 54%─ said they were satisfied with their bonus, up from 40% last year. Robert Thesiger, managing director at Morgan McKinley, put the discrepancy down to improved expectations management. He said 2004 bonuses were more performance-related than previously: strong players were well rewarded.

Andrew Chancellor, head of financial services recruitment at recruiter Robert Walters, said while bonuses were generally up in 2004, banks flagged poor bonuses in advance: 'People were given more warning. Banks made more effort to explain how the business was doing globally, and issues such as trading in some bonus for better work life balance came into play.'

If bonuses foundered, base salaries rose more strongly in 2004. According to Morgan McKinley, salaries rose nearly 5% during the year to an average of 46,113. As a result, bonuses as a proportion of salaries fell slightly during the year, from 33% to 31%.

sbutcher@efinancialcareers.com