Junior U.K. Merger Bankers Get 70% Bonus Jump, Survey Shows

Junior U.K. merger bankers received a 70 percent jump in 2015 bonuses as their employers seek to stem departures after two years of low payouts, according to salary benchmarking website Emolument.com.

The median bonus of a vice-president working in the mergers department paid out this year rose to 85,000 pounds ($130,500) from 50,000 pounds, while a director-level banker saw a 6 percent gain to 127,500 pounds, it said in a statement on Wednesday. Bonuses for VPs were as high as 98,000 pounds in 2011 and hit a low of 42,000 pounds in 2013.

“Institutions found themselves with entire junior teams giving up on banking, put off by heavy regulations on pay, poor press for bankers and a gloomy outlook for the industry, to jump over to private equity, which offered dreams of uncapped pay packages,” Thomas Drewry, chief executive officer of Emolument, said in the statement. “The impact of this exodus has hit pitching capabilities hard and banks now find themselves pushing hard to retain junior talent.”

Barclays Plc is planning to raise pay for junior investment bankers as the bank seeks to retain talent, two people with knowledge of the matter said last month. Some Barclays junior employees are set to receive an increase of 20 percent to 40 percent in salary and bonuses, said two people familiar with the plans, who asked not to be identified because the move isn’t public.

In the U.S., banks have been curbing work hours and improving conditions to stop a loss of talent to the less-regulated private-equity and hedge-fund industries.

Traders have seen their bonuses drop this year, Emolument said. Variable pay for VPs fell to 36,000 pounds from 43,000 pounds last year, while directors’ bonuses declined to 75,000 pounds from 100,000 pounds.

Emolument surveyed about 190 individuals for the 2015 data.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE