Why you may become richer working for an international investment bank next year

One of the consequences of the potential G20 crackdown on investment banker bonuses is that base salaries could skyrocket. This is likely to give the Middle Eastern operations of international firms an edge in attracting staff as regional competitors pare back pay.

If banks in the G20 can't pay such generous bonuses, they will look to more creative methods to compensate their staff, such as much higher base salaries or bulked up "benefits in kind" suggests Jon Terry, partner in the rewards practice at PricewaterhouseCoopers.

The likes of Citi, UBS, Bank of America Merrill Lynch and Royal Bank of Scotland are thought to be already employing such tactics.

Of course, with the exception of Saudi Arabia, GCC states are not part of the G20, and the Dubai Financial Services Authority has already said it will not regulate bonus payouts.

But slumping revenues means banks in the region are cutting compensation anyway. And any international firm hiking base pay is likely to do so across the entire organisation, making it a more attractive proposition to Middle Eastern bankers.

Mohammed A. Laghari, principal, head of broad based rewards, Middle East at Mercer, tells us: "Most firms we speak to ask if they should be freezing compensation. With the cost of living going down especially due to reduction in cost of house rents and such like, it makes good sense to them to do so."

In fact, most firms are looking to cut pay. A survey by Arabian Business suggests that the majority of firms in the UAE have reduced salaries between 26-30%.

"Cuts in salaries reflect the drop in rents and overall inflation. It is more important to consider what remains in the pocket than what one takes home," a recruitment expert in the banking sector said.