The end of year salary survey from banking recruiter Armstrong International confirms suspicions that 2005 bonuses may be less dramatic than billed.
Top performers in areas like investment banking, private banking and interest rate and equity derivatives can expect bonuses 20% higher than last year, but Armstrong says rewards will be targeted at the top quartile and that everyone else will receive the same as (or less than) 2004. In some areas, like fund of funds and credit derivatives, it suggests bonuses will be down.
Aidan Kennedy, partner of Armstrong International, puts a damper on the urge to pre-order a Porsche 911 Turbo Cabriolet. "This is not a bumper bonus year," he says. "People will look back on it as being far more like the mid-1990s than 2000."
In the credit derivatives area, Armstrong predicts senior traders who were paid more than $3m last year, will be lucky to receive more than $2m this year. It says managing directors in equity research are likely to see pay 50% lower than during the 2000 boom, at between 450,000 and 750,000.
More promisingly, Armstrong says top managing directors in investment banking can expect bonuses of up to $3m, and top derivatives marketers can expect to take home more than $1.5m.
The company also highlights a return to that archetypal boom time phenomenon: the guaranteed bonus. Kennedy describes the use of one year guarantees as 'robust,' and says three year packages are on offer to high quality people moving to new platforms, or to high quality individuals at existing platforms who threaten to move elsewhere.
Armstrong's survey covered individuals at 45 different banks, including Goldman Sachs, Morgan Stanley, JP Morgan and Citigroup.