Are you pessimistic about 2008? Do you think bonuses will sink next year? Most of eFC's users in the U.S. agree with you.
A plurality of eFinancialCareers users in the U.S. are pessimistic about markets for 2008, and a majority expect next year's bonuses to decline, an online survey shows. For this year, however, almost twice as many users anticipate a larger bonus than a smaller when compared with 2006.
Based on more than 2,500 responses to our online survey during November, the findings comport with results of compensation surveys published by consultants and headhunters over the past couple of months. While the credit seizure that began last summer has cast a pall over 2008 expectations, payouts for this year - in groups other than fixed-income - may be propped by the hefty fees and profits generated over the first half, when market conditions were broadly buoyant.
Of the 2,565 who responded to our poll between Nov. 13 - 26, 41 percent feel markets in 2008 will be "worse than 2007." That compares with 26 percent who expect better conditions next year, and 33 percent who expect no change.
A little more than half (52 percent) agreed that "bonus levels are going to fall in 2008." That's almost double the 27 percent who answered in the negative. The remaining 21 percent said they don't know. "Problems in the credit markets" and "reduced profitability in the financial services sector" were by far the most common reasons cited for reduced bonuses next year.
Interestingly, higher-paid respondents were more likely to expect a relatively large percentage increase in their bonus for this year. Among those anticipating a bonus at least 30 percent more than they got for 2006, the median base salary was about $91,000. And a greater proportion of this group than the overall survey group reported a 2006 bonus of $60,000 or more.
Who Answered Our Survey?
A small majority of poll respondents say they hold front-office positions, with the rest divided almost equally between back-office and middle-office. As expected, front-office respondents reported higher compensation than those in the back office, and those working at hedge funds had higher compensation than the overall group.
Analysts and associates make up almost 40 percent of the group, vice presidents another 10 percent. A further 6 percent identified themselves as directors, but just 0.5 percent as executive directors. Managing directors make up 2.7percent.
Among the remaining 41 percent who didn't pick one of the above titles, the largest component, 7 percent, chose simply "manager." Other all-purpose titles included "project manager" (2.3 percent), "assistant" (2.5 percent), "strategy/business analyst" (2.2 percent), and "head of" (2.1 percent). About 1 percent were chief executives and 1.5 percent were chief financial officers. Twenty-one percent couldn't be classified.
Among all respondents, the median base salary is about $87,000. A little over a third of the group (35 percent) reported a base between $60,000 - $100,000. Another 23 percent make $100,000 -150,000 base. Sixteen percent make more than $150,000 base, and 2 percent said their base exceeds $500,000.