So you still want a guaranteed bonus to change jobs on Wall Street, or in the City of London?

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Guaranteed bonuses still exist. Just look at the compensation reports of Credit Suisse or UBS: both are still paying people defined bonuses to switch employers. But guarantees are not what they were.

Back in 2007, it wasn't unheard of for banks to dangle two-year guaranteed bonuses as an incentive for people to join them. Eight years on, Jeanne Branthover, global financial services leader for Boyden Executive Search, says she hasn't seen such things on Wall Street since the financial crisis. "You never get a two-year guarantee now, and one year bonus guarantees have become more infrequent," she says. "A lot of lessons were learned during the financial crisis and one of them was that if things go bad and you're a bank with a lot of guarantees out there, you will have no cash."

It's testimony to banks' aversion to guaranteed bonuses that they're unwilling to offer them even as the Wall Street job market heats up. "It's a candidates' market here now," says Branthover. "We're seeing a lot of people candidates with multiple job offers, but we're still not seeing banks offering a lot of hard guarantees. They're rare and will only usually be offered at the end of the year to buy out bonuses, and then only to excellent candidates."

In place of so-called 'hard guarantees' in which newly-hired candidates receive a contractual assurance that their first year bonus will categorically be $X, Branthover says Wall Street banks are going for approximations. "They'll say that on a base of $350k you should expect a bonus of $X, but it won't be guaranteed. The wording will say that it's based partly on your own performance and partly on the performance of the company. As an individual, you have a lot less control over the amount you receive."

In the City of London, guaranteed bonuses for new hires were outlawed in all but exceptional circumstances back in 2011. However, headhunters say the new Wall Street-style soft guarantees are still a thing. "We're seeing a lot of people getting indicative bonuses," says one. "You get contracts which say, 'We have verbally discussed with you that you will receive a bonus of X if your performance is acceptable.'

"We also see guarantees which are based around subjective performance targets that can be assessed by the client. They're easy for banks to take away if necessary," he adds.

Before the financial crisis, 'verbal guarantees' were a common source of contention, with bankers frequently suing the banks employing them when the bonuses they'd been promised didn't turn up. "Verbal guarantees were not worth as much as they paper they're not written on," says Charles Ferguson, head of Ferguson Solicitors, an employment law firm in London. Nowadays, Ferguson says the new-style indicative guaranteed bonuses are so open-ended that it's impossible to sue a bank when they're not paid out: "Bonus related court cases have all but dried up."

Andy Pringle, managing director of recruitment firm Circle Square, says the demise of old hard guaranteed bonuses is no bad thing anyway. "If you've got a guarantee that you'll receive a bonus of $X as long as you're in employment, the first thing they'll do when revenues disappear is to fire you," he points out.


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