Big deals don't mean big bonuses

The value of global M&A deals may be higher than ever, but the same can't be said for fees and this year's investment banking bonuses.

Figures compiled for eFinancialCareers.com from data provider Dealogic show fees from European M&A deals so far this year are 7% lower than in 2005 and 37% below their level in the boom year of 2000.

The decline reflects the squeeze on fees from increased competition, and runs counter to a survey undertaken by Financial News last month, which found 94% of investment bankers expected M&A fees this year to be equal to or higher than 2005.

Falling fees aren't likely to play well with bankers quivering with anticipation about the potential size of their bonuses. With the value of announced global M&A deals currently higher than in 2000, a recent report in the US publication Investment Dealers Digest suggested many M&A bankers are readying themselves for a handsome rise.

"The general view is that 25% seems to be the floor," John Rogan, global head of financial services at Russell Reynolds was reported as saying. "Bankers who are having a strong year, in hot sectors such as energy, are expecting more like a 50% increase."

Noel Marshall, managing director of the banking and finance team at recruitment firm Finance Professionals, warns against over-optimism. "Only the lead deal doers are going to get the huge bonuses. We've come a long way from 2000 when people got big bonuses just for working in M&A."