A first look at bonus season 2016: Happiest banks in London

With a tidal wave of bankers entering their new bonus details into the Emolument platform as soon as their 'number' is announced, we have been able to start picking apart those very early results. They include bonus figures from some of the world's best paying banks in London: BAML, Citigroup, Jefferies, RBC, Credit Suisse, Goldman Sachs, JP Morgan and Morgan Stanley. Crucially, we have asked bankers to respond to 'Are you happy with your bonus?' by 'Yes', 'No' and 'Unsure'.

So, who are the happiest bankers in London? Below is our brand new 'Emolument Happiness Index', which looks at responses per bank for the current bonus season.

Based on 1,033 front office bankers (IB&Markets) in London in 2015/2016

A good vintage so far: Bonuses are up

While salaries did not increase much year on year, there has been a substantial jump in bonus numbers all the way from Associate to Managing Director. As it is still early days and our 2016 sample is about 20% of the 2015 sample, the trend is obvious. Large bonuses are back however, it is worth bearing in mind that most of these firms are top tier and based in the US and will therefore have been the main beneficiary of the large M&A transactions of 2015. It may well be a very different story for the next spate of banks announcing bonuses shortly.

BAML and Jefferies at opposite ends of the spectrum

With median total comp at Jefferies substantially lower than at BAML (£200,000 versus £160,000), how do Jefferies manage to be the happiest bank in London? Probably down to the high level of transparency when it comes to bonus policy with an impressively low 20% of bankers being unsure of how they should perceive their bonuses. At the opposite end, BAML comes bottom (adding 45% 'No' + 31% 'Unsure') with 76% of dissatisfied or hesitant employees. So bankers are not just about the money after all.

Why the long faces? It's not all about large bonuses

Few bankers are satisfied with their bonuses, which is surprising considering overall pay has increased substantially year on year. Increased pressure on staff with cost-cutting measures, vast redundancy plans, technology taking over many of the traditional markets jobs all go some way to explaining the frustration felt by bankers this year. Also, while numbers are higher than in 2015, they are likely to be highly polarised, with many 'doughnuts' (zero bonuses) which have become a default practice, and some very large strategic bonus payments at the other end of the spectrum.

Lack of transparency in any organisation and its culture when it comes to discussing bonuses has a huge impact on productivity. No matter how much a bank pays its employees, if the process is shrouded in secrecy, the levels of paranoia and suspicion wipe off goodwill earned through higher bonus payments.

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