Are FICC bonuses really three times higher than IBD bonuses this year?

15 February 2010

2 minute read

Are FICC bonuses really three times higher than IBD bonuses this year?

Here, by popular demand, we have a brief breakdown of bonuses on a sector by sector basis, according to the findings of our recent bonus survey.

In total, just over 400 full time front office investment bankers (and buysiders) responded to the survey. However, for people who actually reported the value of their bonuses, the sample size on a sector basis was often considerably smaller than that.

We leave it to you to judge whether the figures below are correct. Bear in mind they cover people across a broad range of seniority levels.

1) Fixed income, currencies and commodities

Average bonus for 2009: 477k (mean); 145k (median)

Average bonus for 2008: 222k (mean); 60k (median)

Percentage increase: 114% (mean); 143% (median)

Sample size: 36

2) All trading roles

Average bonus for 2009: 385k (mean); 80k (median)

Average bonus for 2008: 188k (mean); 15k (median)

Percentage increase: 105% (mean); 433% (median)

Sample size: 25

3) Corporate finance/IBD

Average bonus for 2009: 175k (mean); 58k (median)

Average bonus for 2008: 120k (mean); 30k (median)

Percentage increase: 46% (mean); 93% (median)

Sample size: 42

4) Institutional fund management

Average bonus for 2009: 129k (mean); 60k (median)

Average bonus for 2008: 69k (mean); 50k (median)

Percentage increase: 87% (mean); 20% (median)

Sample size: 23

AUTHORSarah Butcher

Global Editor

de
derived.md
16 February 2010
Kpax makes a good point - bonuses in IBD are high for senior relationship managers (think origination of M&A / financing business, and the RISK-FREE fees that this brings in - straight to the bottom line)
However it takes a long, long time to get there; what value do you put on:
(a) the agony one goes through en route (filing, faxing, late nights, weekends & Powerpoint)
and
(b) the cumulative value of bonuses (i.e. spread below comparable FICC) that you miss out on for the first ten years of your career
Economically, IBD is a risky trade.
Reply
Kp
Kpax
16 February 2010
Probably it's only the junior levels who bother to respond to such a survey. I don't imagine the CEO of Goldman Sachs has entered his bonus here to make sure the numbers are right...
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re
rellik
16 February 2010
To be comparable, you need to take into account the life expectancy of these jobs and the opportunity costs.
On the one hand, traders are like sportmen, they don't thrive more than 10 years usually. They need to make more money and quicker than IBD then
On the other hand, the opportunity costs for traders are quite high given it is difficult to be "recycled" in other jobs afterwards, except hedge funds for a minority of them.
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FX
FXTrader
16 February 2010
Simple...because we're worth it! :-)
Reply
Ch
Christian
16 February 2010
it's because traders are the smartest ;P
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