Predicting 2010 analyst bonuses

It's going to be an interesting year for analyst bonuses in M&A. On one hand, things are looking pretty dire. On the other, banks will need to pay up regardless.

The dire vista comes from the fact that there really hasn't been much going on so far in 2010. According to Dealogic, fees earned for M&A activity in Europe year to date total $1.4bn. Last year, the comparable figure was $2.3bn. And last year was bad.

In any normal year, this would probably mean that analysts would take home dire bonuses this summer. But recruiters say this is unlikely.

"People are definitely expecting to get paid, and there's still a lot of demand for experienced analysts," says one junior M&A recruiter. "Nomura have already paid theirs and they've set the bar quite high. Also, associate bonuses at the start of this year were back to 2007 levels, so the expectation is that analysts will be paid similarly."

According to articles we've written in the past, bonuses for analysts working in M&A at large investment banks were roughly as follows in recent years:

2009:

· Analyst 1: 10-20k

· Analyst 2: 20-30k

· Analyst 3: 30-60k

2008

· Analyst 1: 16-40k

· Analyst 2: 20-45k

· Analyst 3: 40-60k

2007

(Averages)

· Analyst 1: 48k

· Analyst 2: 63k

· Analyst 3: 77k

A return to 2007 levels would therefore be exciting. Given subdued fees, this seems unlikely, however. "I'm expecting a 10-15% increase in 2010," says another recruiter.