Do big M&A fees equal big pay packets?

Goldman Sachs is set to be the big earner from Mittal Steel's bid for France-based Arcelor. But how much of the fee will end up in bankers' pockets?

An article in The Independent at the weekend suggested Mittal Steel will pay $100m (53m) in fees for its hostile bid for the rival steelmaker Arcelor. Much of this will go to Goldman Sachs, the lead bank on the deal.

M&A bankers are likely to do well from the affair, but recruiters say it's difficult to say just how well. "The average managing director at a large bank is usually expected to bring in between $50m to $100m in fees during a year," says one. "In some very rare cases they will then be paid 25% of whatever they bring in above that threshold."

Whether this happens at Goldman, which has a notoriously collegial culture, is another question, however.

Jonathan Baines, chairman of headhunter Whitehead Mann, denied the existence of percentage deals for corporate financiers. "I cannot recall having seen anything of this nature in my time, and have certainly not worked for any organisation that's prepared to put this kind of deal in place."