Tuesday 11th March 2014, a good year for bonuses? On the face of it, yes. eFinancialCareers’ latest Global Bonus Survey* reveals that the average bonus increased by 29% in 2013 compared to last year. City workers also command the highest average bonus in comparison to their colleagues in the world’s major financial markets. Yet, a significant proportion (41%) four in 10 declared that their bonus is still beneath their expectations. So what’s going on?
The survey, which over 700 UK-based financial services professionals responded to, and who knew the amount of their annual bonus, reveals that nearly half of respondents (49%) reported an increase – this compares to 40% last year. Just under 2 in 10 (18%) reported a decrease. When asked about the primary reason behind their bonus increase, over half of respondents (51%) said it was down to personal performance. Only two in ten (19%) attribute the increase to their firm performance.
Despite the overall average bonus increase in 2013, satisfaction with bonus increased marginally: 39% of the finance professionals surveyed said their bonus met their expectations, this compares to 38% in 2012. A sizeable proportion of respondents (41%) reported that their pay-out had missed their expectations.
The eFinancialCareers Global Bonus Survey, which asked over 2,650 financial professionals about their bonuses in the UK, US, Hong Kong, Singapore and Australia, shows the highest average bonus is to be found in the City of London, followed by Wall Street, Sydney, Hong Kong, and Singapore. London’s pole position may seem surprising given European Union restrictions on bonuses, but the big bonuses in the City are a reflection of its importance as a financial centre, as highlighted by Angela Merkel in her recent speech to a joint session of the UK parliament. The UK’s comparatively high global bonuses are undoubtedly helped by the fact that the country has a high proportion of highly paid front office, revenue generating staff.
“While the results of survey may seem surprising, a deeper look into the UK bonus trend finds that banks are dividing their bonus pool more ruthlessly, with a priority placed on rewarding top performers. Banks argue that they need to pay large bonuses to keep their top talent. It would appear that a handful have been awarded handsome bonuses while the the majority did not necessarily see a huge increase,” comments James Bennett, Global Managing Director of eFinancialCareers. “The world’s biggest financial centres all compete for the top talent, and banks will ensure they keep rewarding their best performers.”
To see the infographic for an overview of results, please click on the following link: http://issuu.com/efcapac/docs/uk_financial_services_bonuses_2014
Table 1: Self reported change in bonus size, 2013
|
|
UK |
US |
HK |
SG |
AUS |
|
Increased |
49% |
47% |
47% |
42% |
45% |
|
Decreased |
18% |
17% |
16% |
18% |
19% |
|
Same |
21% |
24% |
24% |
28% |
22% |
|
A bonus was not part of their 2012 compensation |
13% |
11% |
13% |
12% |
14% |
Please note total may not add up to 100 due to rounding
Table 2: Cause of bonus increase, 2013
|
|
UK |
US |
SG |
HK |
Aus |
|
Personal Performance |
51% |
45% |
46% |
41% |
51% |
|
Firm Performance |
19% |
30% |
19% |
24% |
17% |
|
Changed Employers |
11% |
10% |
13% |
13% |
4% |
|
Changed positions within employers |
6% |
4% |
7% |
8% |
8% |
|
Department performance |
7% |
7% |
3% |
8% |
13% |
|
Pay structure changed |
2% |
3% |
10% |
5% |
3% |
|
Other |
4% |
2% |
3% |
3% |
6% |
Please note total may not add up to 100 due to rounding
Table 3: Bonus vs. Expectations, 2013
|
|
UK |
US |
SG |
HK |
Aus |
|
Exceeded expectations |
13% |
10% |
12% |
13% |
14% |
|
Met expectations |
39% |
38% |
33% |
37% |
36% |
|
Beneath expectations |
41% |
38% |
42% |
33% |
40% |
|
I had no expectations |
8% |
14% |
13% |
17% |
10% |
Please note total may not add up to 100 due to rounding
Source: eFinancialCareers Global Bonus Survey