Banks pay up for financiers

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A recent salary survey by headhunters Longbridge also found that firms are offering accelerated movement to associate or manager level staff. Banks had previously only offered such packages to bankers they wanted to poach.

Lena Baillie, a consultant at Longbridge, says: 'Some banks are guaranteeing a set bonus to associates and are fast-tracking them through. And this is not just happening at the banks which are merging and might be temporarily unstable. It's a much wider trend.'

Banks that are facing mergers have been especially generous. Insiders at Dresdner Kleinwort Benson say that junior bankers have had their bonuses trebled this year. There have also been generous lock-in arrangements at Schroder Salomon Smith Barney.

Some US firms are also allowing bankers to borrow against bonuses at favourable rates. Even Goldman Sachs, one of the most sought-after employers, has been giving share options to employees who have joined since the flotation and so missed out on earlier pay-outs. Such bonuses are increasingly being accompanied by 'co-investment', which allows employees to invest in internet start-ups alongside their firms.

Competition for recruits has intensified along with deal flow and, although dot-coms no longer offer the same allure to bankers that they did a few months ago, experienced bankers are at a premium.

Longbridge's survey of salaries shows that associates or managers in corporate finance are typically paid 48,000 to 68,000 (€76,800 to €108,800), plus bonuses of between 35% and 100% of their salaries. Managing directors are paid between 90,000 and 150,000, with bonuses ranging from 75% to 400%, although they could sometimes be higher, Longbridge says.