U.S. Investment Banker Bonuses 60% Larger than Europeans'

The average bonus for associates at U.S. investment banks in 2012 was more than 60% larger than that of their European brethren, according to a new survey. European banks softened the blow, however, by paying mostly in cash.

Associates at U.S. investment banks took home an average bonus of more than $134k in 2012, up from $116k in 2011, according to an annual survey from WallStreetComps.com, a group of former investment bankers who gather data from their ex-colleagues.

Associates at European firms, meanwhile, earned just $82k in bonuses. European bankers were given spending money, though. Nearly the entire average bonus – 96% – was paid in cash, up from 74% a year earlier. Several European banks made efforts last year to pay bankers in cash rather than deferring compensation to keep their balance sheets true knowing strict capital requirements are in waiting.

Roughly 80% of American banker bonuses were paid in cash, down from 88% a year earlier. Bonuses for associates who graduated less than five months before the survey was conducted were not taken into account, hence the rather lofty average numbers.

Overall, the average bonus was down more than 5% across the board in 2012. Vice presidents appeared to take the brunt of the punishment. The average bonus for VPs at U.S. banks was $218k in 2012, down from $257k a year earlier. The average portion paid in cash increased though, from 62% to 78%.

European VPs actually took home more – an average of $246k – but the study only looked at two European banks at that level. The number drops to $175k if you throw out Barclays, which was especially generous with its bonus structure, paying their most junior people 98% in cash. Associate III bankers at Barclays took home 80% of their bonus in cash. Among U.S. firms, Bank of America and J.P. Morgan were most likely to defer bonuses.

The disparity falls in line with the performances of banks headquartered on each side of the pond. The European investment banking world took it on the chin last year, generating only 23% of global investment banking revenue, the lowest share on record, while the U.S. accounted for its greatest revenue share in nearly a decade.

The survey included responses from 400 investment bankers across more than 20 banks and boutiques.