City workers’ bonus hopes remain high as two-thirds anticipate pay-outs this season

Over a third expect bonuses to increase but expectations could be over-optimistic

City workers’ bonus hopes remain high this season, with almost two-thirds (64%) expecting a pay-out from their employers*, reveals research by Astbury Marsden, a leading recruitment firm.

However, Astbury Marsden says that many City workers are likely to be disappointed, as the performance of a number of banks and fund managers is notably worse than last year. 

Astbury Marsden says that the current level of optimism over bonus levels is broadly in line with last year’s sentiments (when 66% said they expected to receive a bonus), suggesting a sense of confidence in the City’s performance and prospects. However, this may not be realistic for all financial institutions. 

According to Astbury Marsden, more than one third (35%) are anticipating bonuses to increase on last year, while just 13% expect them to decrease.

Astbury Marsden found that Managing Directors and Partners expect the highest bonuses as a proportion of pay at 61% of their average salary (or £99,985). 

Directors and Executive Directors have the second highest bonus expectations, anticipating payments of 37% of salary (or £47,195).

Astbury Marsden says that many institutions may struggle to meet the proportions of salaries expected by senior staff and stay within the costs to income ratios they are targeting. 

Astbury Marsden says despite a deterioration in business performance for investment banks, staff are expecting higher bonus payments than last year with an increase of £2,301 to £24,461, making it a quarter of their average salary.

Adam Jackson, Managing Director of Astbury Marsden says, “City workers generally appear to be feeling buoyant about bonus prospects this year. Top level management are particularly bullish but this optimism is being severely tested.”

“With investment bankers predicting a rise to their bonus payments this season, the current state of the market suggests that such positivity may be unjustified.”

The pressure from shareholders and politicians to keep bonuses firmly down with bonus caps may be restraining bonuses in some quarters.

Over half of City workers expect a pay rise

In line with bonus expectations, Astbury Marsden found that over half (51%) of respondents anticipate a rise in pay in 2016. 

Overall, average base pay in the City jumped 8% over the last year to £92,669.

Junior executives were found to be much more confident than their senior colleagues over further pay increases. 60% of AVP/manager level staff thought their pay would increase compared to just 37% of Managing Directors/Partners. 

Adam Jackson adds, “Future remuneration prospects are looking fairly mixed across job levels, with more senior staff pessimistic about a pay rise. Employers will have to manage the expectations of more junior staff carefully if they wish to avoid too high a level of staff attrition in spring.” 

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