Forecasts for 2015 Bonus Vintage
We have examined salary data from 3,600 professionals working in front office in IBD, FICC and equities in London for 2014.
- Origination and advisory professionals have momentum: thanks to a strong year of dealmaking by M&A departments, trickling down to new issuance for DCM and ECM markets, we expect bonuses to be up by 25% on average
- Equities bonuses should be in slight decrease: despite a satisfying year across many equity desks, especially in prime services, bonuses are expected to be unchanged to down slightly (3%), which is mainly due to losses in the equity derivatives market
- Notable decline for FICC bonuses: affected by poor results on Rates, FX and emerging markets, FICC industry professionals will see there bonus melt away by 5%, but we expect Credit to stand out, having benefitted from new issuance in 2014
While our forecasts look at bonus pools per business line and the historical distribution by title, we expect to see a strong trend of rewarding more junior bankers in 2015. Many teams encountered a major retention issue with young talent keen to make the switch to the buy side or private equity firms, where they can expect bonuses uncapped by regulation, and often a less intense corporate culture. This exodus away from banking have left entire teams depleted of their Associates and VPs, leading to incapacity to pitch or execute new business.
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