UK banks begin to adopt bonus reform but financial professionals fear for the long-term competitiven

Added: (Tue Nov 10 2009)

Pressbox (Press Release) - Ahead of the bonus reporting season for UK banks, the latest survey of 654 UK financial professionals by eFinancialCareers.com, the leading global careers site for financial professionals, shows that many in the City do not anticipate lavish windfalls this year – though for the majority, 2009 is still set to be a better year than 2008.


According to the findings of the eFinancialCareers.com survey, just over half of the respondents (55%) are expecting to receive a higher bonus in 2009 than in 2008, including 18% of all respondents expecting this year’s bonus to be 71% or more higher.


However, amongst those expecting a rise, 37% attribute the main reason for the potential increase to the “abnormally low” bonuses of 2008, with only 27% citing the “firm’s performance”.


For many, however, the findings of the eFinancialCareers.com survey suggest an environment of static or declining bonuses with one in three (34%) expecting their bonus payments to be the same or less than last year’s payments and 1 in 10 expecting no bonus at all this year. Amongst those anticipating a lower bonus this year, the overwhelming reason given was the poor performance of their respective firms.


Turning to the area of bonus structures, the results of the eFinancialCareers.com survey also suggest many financial organisations in the UK are starting to take heed of the calls for reform ahead of new regulation being implemented. Of those participating in the survey, 43% believe their firms’ compensation policies for this year’s bonus round already follow – or are now being changed to follow - FSA recommendations. However, 57% of respondents said they do not expect their organisation to change this year’s bonus structure in line with the FSA recommendations.


Furthermore – and contrary to the current FSA recommendations - nearly 59% of those expecting to receive a bonus this year are not anticipating any element of it to be deferred. That said, 28% are expecting between 11-50% of their bonus to be deferred, with 9% expecting more than half of their bonus to be held-back.


The eFinancialCareers.com survey of primarily experienced, front office, financial professionals also shows that the majority (56%) are concerned that the implementation of the G20 framework for greater capital requirements, new liquidity rules and compensation reforms will adversely impact the future competitiveness of the UK banking industry. Only 28% felt they would not, with 16% undecided.


Amongst those expressing concern, the primary reason cited was the fear that not all regions of the world will adopt the G20 framework resulting in the UK losing out to those regions that choose to ignore it. The second main concern was that different regulatory bodies in each G20 country will be responsible for enforcing the framework potentially leading to a non-standardised, non-uniform implementation within the G20 states.


John Benson, CEO and founder of eFinancialCareers.com, commented:

“Our survey reveals a complex environment in the UK as the finance industry comes to terms with reform. How firms restructure their compensation policies in the light of G20, government, regulatory and central bank initiatives will, we believe, be a dominant issue for firms as they fight to hire and retain top talent.”


The survey of 654 UK financial professionals was conducted between 26th of October 2009 and 30th of October 2009. Of those surveyed, 60% had more than 6 years experience and 62% worked in the front office of their respective divisions.


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About eFinancialCareers

eFinancialCareers, a Dice Holdings, Inc. company, 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.co.uk

Further press information

Please contact Christian Pickel or Brooke Paul (gth media) on 020 7153 8036/8035 for further details.