Lunchtime Links: Post-tax bonuses per head for 2010 will be on a par with 2003
Investment banking is an industry in which pay is getting worse, not better. The combination of today's CEBR City bonus predictions with April's CEBR City headcount predictions suggests the average (mean) net bonus per head for 2010 will be 11.9k. The last time it was at this level was seven years ago.
As the CEBR is keen to point out, 58% of this year's overall bonus pool will go to HMRC once income tax and national insurance are taken into consideration. Before the higher rate of income tax was increased to 50% in April this year, the HMRC's overall allocation was only 53%.
Bonuses of 11.9k fall far below the 150k threshold at which the new 50% tax rate takes effect. The CEBR appears to be (correctly) assuming that the distribution will be skewed in terms of top performers or that most of this year's bonus pool will go to people whose salary takes them to the 150k threshold.
Source: CEBR
7bn City bonuses will anger public, says Cameron. (Guardian)
Kerviel earned €100k in a 'good year.' (Financial News)
Kerviel conceded to Judge Dominique Pauthe at trial that accumulating positions worth 50 billion euros was "probably not" in his mandate. (Bloomberg)
The Swiss model of sanitizing mega banks would massively reduce the returns for shareholders and the remuneration of bankers. (Dealbook)
Hugh Hendry misbehaves every day. (BBC)
