Hedge Fund Employees Say Cha-Ching to Year End Bonuses, While Expectations at Banks Sink
NEW YORK, Oct. 10, 2011 /PRNewswire/ -- As Wall Street works its way toward the end of a turbulent 2011, the bonus expectations of U.S.-based financial markets professionals remain relatively high, driven by steep expectations of stronger bonuses by hedge fund, boutique bank and professional services firm employees.
Overall, more than six in 10 (62%) of the Wall Street employees surveyed by eFinancialCareers.com expect their bonus this year will be higher or the same in comparison to the bonus they earned in 2010. This current level of expectation represents a down tick from a year ago, when 71 percent of survey respondents believed their annual bonus would increase or remain level. In part, the falloff is due to lower expectations from large bank employees. For those respondents working in commercial or bulge-bracket banks, 38 percent expect bonus payouts to decrease this year, as compared to 36 percent who are anticipating higher payouts.
Personal performance (45%) and firm performance (22%) hold sway as the primary reasons driving anticipated year-end bonus increases. Among the 30 percent of respondents who report expecting decreased bonuses at year's end (a figure up sharply from last year's 20 percent who expected smaller bonuses) firm performance (40%) and market conditions (35%) stand out as the most-cited primary causes.
"If managing financial markets is Wall Street science, then managing professionals' expectations on compensation is one of Wall Street's premier arts," said Constance Melrose, Managing Director, eFinancialCareers North America. "Even amid an atmosphere of slower recruitment activity and targeted layoffs, Wall Street will continue to be a pay-for-performance culture. Firms need to be resolute in taking care of their best in class employees, as they will always have opportunities to make a career move if they feel disenchanted."
The Dodd-Frank Act continues to remain rooted in the minds of financial markets professionals. Asked about the recent layoffs on Wall Street and whether Dodd-Frank's weighting of compensation toward base salary rather than bonuses played a role, a majority (52%) agree the Act has contributed to the downsizing.
Asked to make a prediction about bonuses sizes over the next three years, 46 percent say they expect bonuses to decrease in the future, up from 30 percent a year ago. On the flip side, 20 percent say they expect bonuses to increase between now and 2014, a decline from 34 percent last year. Market conditions dominated the list of factors pressuring compensation, followed by the Dodd-Frank Act and voluntary restraint by firms.
One response has remained almost perfectly stable year to year: the majority of Wall Street professionals (59% in 2011, versus 61% in 2010) tell us that money, while important, isn't the most important reason why they work in the financial markets. The remainder (39%, versus 37% last year) say compensation is the most important reason to work on Wall Street. Again, a mere two percent indicate that compensation is not important at all.
About the Survey
The 2011 eFinancialCareers Bonus Expectations Survey took place in the United States between September 20 and October 3, 2011 with 1,098 currently employed financial markets professionals responding. Of those respondents, 53 percent work in the front office, 25 percent in the middle office and 22 percent in the back office.
Table 1: What do you expect to happen to your bonus this year compared to last year? |
|||
2011 |
2010 |
||
71%+ more |
6% |
7% |
|
51-70% more |
3% |
4% |
|
31-50% more |
5% |
8% |
|
11-30% more |
12% |
15% |
|
0-10% more |
15% |
16% |
|
No Change |
21% |
21% |
|
0-10% less |
10% |
7% |
|
11-30% less |
8% |
7% |
|
31-50% less |
9% |
4% |
|
51-70% less |
2% |
1% |
|
71-99% less |
1% |
1% |
|
I will have no bonus |
8% |
9% |
|
Table 2: What do you expect to happen to your bonus this year compared to last year? |
||
Commercial & Bulge-Bracket Bank |
||
Increase |
36% |
|
No change from one year ago |
19% |
|
Decrease |
38% |
|
I will have no bonus this year |
7% |
|
Table 3: What is the primary reason you anticipate a change in your bonus? |
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Respondents Expecting an |
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Increase |
Decrease |
||
Personal Performance |
45% |
2% |
|
Department Performance |
9% |
7% |
|
Firm Performance |
22% |
40% |
|
Changed Positions within Employer |
7% |
3% |
|
Changed Employers |
7% |
3% |
|
Market Conditions |
3% |
35% |
|
Pay Structure Changed |
4% |
8% |
|
Other |
3% |
2% |
|
Table 4: Do you believe the component of Dodd-Frank that weights |
||
Yes, strongly agree |
16% |
|
Yes, slightly agree |
36% |
|
No impact |
19% |
|
No, slightly disagree |
7% |
|
No, strongly disagree |
4% |
|
No opinion |
18% |
|
Table 5: Over the next three years, what do you think will happen |
|||
2011 |
2010 |
||
Industry bonuses will increase |
20% |
34% |
|
Industry bonuses will remain the same |
34% |
36% |
|
Industry bonuses will decrease |
46% |
30% |
|
Table 6: Which concerns you most currently about potential |
|||
2011 |
2010 |
||
Market Conditions |
68% |
59% |
|
Dodd-Frank |
11% |
17% |
|
Basel Accord |
2% |
2% |
|
Voluntary restraint by firms |
11% |
14% |
|
I have no concerns |
8% |
8% |
|
Table 7: How important is compensation in your decision to work |
|||
2011 |
2010 |
||
It's the most important reason |
39% |
37% |
|
It's important, but not the most important reason |
59% |
61% |
|
Not an important reason |
2% |
2% |
|
About eFinancialCareers
eFinancialCareers, a Dice Holdings, Inc. service, is the leading global career site network for professionals working in the investment banking, asset management and securities industries. The website provides financial services professionals with job opportunities, job market news and analysis, salary surveys and career advice. Recruiters and employers can post jobs targeting specific sectors within the financial services industry, both buy-side and sell-side, and can search the resume database for highly qualified and specialized professionals. eFinancialCareers has a network of co-branded career sites with industry-leading trade publications and offers local websites in 18 markets and five languages primarily across North America, Europe, the Middle East and Asia-Pacific. www.eFinancialCareers.com
Media Contacts:
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SOURCE eFinancialCareers.com
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