As their local bonuses fall, Asian opportunities may open up for top-performing senior bankers in Australia
Research released by the Australian Council of Superannuation Investors (ACSI) this week showed that the annual bonuses paid to chief executives at Australia’s top-100 companies last year dropped by 20 per cent to an average of $1.25m, the lowest level since 2004. Headhunters believe this may cause firms in Asia to swoop on high-performing senior Australian professionals, including bankers.
Ann Byrne, CEO, ACSI, attributes the fall to a more mature conversation on executive pay that is taking place between boards and investors. “It is clear that directors began listening to shareholder views on bonus sizes during 2011 and began making the adjustments that have continued into the first part of 2012,” she says.
Katie Lahey, managing director, Korn/Ferry International, warns that executives taking pay freezes and bonus cuts at major companies and banks could be headhunted by faster-growing Asian businesses. “A really high-achieving CEO may be in the seat during an economic disruption not of his or her making,” Lahey tells the Australian Financial Review. “Some of our very best CEOs are sought after by companies overseas who can offer very attractive packages and we don’t want to give any reason for our top talent to leave us.”
Craig Michilis, regional director Asia, Profusion Group, agrees: “Banks that are facing financial and regulatory pressure are increasingly at risk of losing highly-performing leaders to banks and firms with profit and growth potential. Asia is becoming more attractive to high achievers as the place for career growth, lifestyle and reward.”
“From a banking and financial services perspective, there is no doubt the landscape is changing, with a continuing focus on Asia,” says Oliver Darkes, managing director, Wellesley Partners. “League tables across all areas of banking are now populated heavily with Asian businesses; this is a sign of the times and an indication of how the future will look.”
There is still downward pressure on bonuses in Australia, given that base salaries remain high and the cost base does not allow for a large bonus pool. With the bonus season under way at the big four Australian banks, and the investment banks to follow in a few months, should senior bankers be concerned? Financial services recruiters say they expect mixed results for C-level management and MDs.
Banks will need to factor in global and local performance, says one search executive, who asked not to be named. She says there are rumours of bonuses being up to 30 per cent less than last year. “When it comes to cash bonuses, those who perform are paid, and those who don’t, aren’t.”
She adds that although there will always be demand for the star rainmakers, many bankers can’t easily change jobs, even if they receive a disappointing bonus. The risk of average talent leaving is not as great as it once was.
