How will the removal of the banker's bonus cap in the UK affect total comp?
So, the UK government is dropping the bonus cap rule that they borrowed from the EU after the financial crisis. The bonus cap stated that bankers were only allowed a bonus that was less than 2x their base pay. Now, bonuses can become unlimited as of October 31. What does this mean for compensation in the UK in the short/medium terms for employees across the hierarchy?
I doubt that firms will start dropping base pay because it will put them at a disadvantage when hiring talent unless every firm in London does this (oligopolistic competition). What is more likely going to happen is that base salaries will not adjust for inflation or raised for a very long-time whilst bonuses will have much more variability.
People in the industry, do you think that bonuses will end up becoming 3x in a period of very good deal flow (perhaps 2025 onwards)? Or are the banks quite happy with what they are offering now?
What does this mean for competition in recruitment for prospects?
Very interesting change in policy that will be interesting to discuss the effects of.
.
By not being a banker
Haha
Geez
Quia iusto quia molestias aliquid harum. Neque voluptatem aut ipsam sit soluta ad odio est. Voluptatem dolorum sint quam eos maxime. Qui vitae rerum id dolorem ut illo voluptatum. Vel temporibus voluptate est eius suscipit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...