Lean bonus for London's bankers
Their New York counterparts will be better paid and this divide is likely to remain, analyst says
Bankers in London, the hub for securities firms in Europe, are bracing for lower bonuses compared with their New York counterparts as earnings from the region plummet and pressure to tighten payouts mounts.
Investment bankers and traders at European banks should expect at least a 15 per cent cut in pay this year, while US lenders may leave compensation unchanged, three consultants said.
That's because bonus pools at European banks might be cut by as much as half, while those at US firms, which can cushion the impact of falling fees in the region with earnings from home, might fall 20 per cent, they said.
"The real split is coming, and we will see the quantum divide this year," Tom Gosling, a partner at PricewaterhouseCoopers in London, said, referring to the difference in pay between the two financial centres.
US regulators didn't have the same obsession with pay structures as the Europeans, he said.
While lower pay for all bankers reflected what might be a temporary drop in business, cuts at European lenders probably would be structural rather than cyclical, cementing a two-tier system, said John Purcell, chief executive of Purcell, a London search firm.
They also could spur some employees to relocate, says recruitment firm Astbury Marsden. Most jobs will be created in Hong Kong, Singapore and Shanghai.
