What do you think? Should this be how bankers and buy side guys are paid or is it a complete disincentive?
Almost two-thirds of U.K. financial services firms have boosted salaries to retain employees before the introduction of European Union limits on bonuses, according to a survey.Companies increased salaries by an average of 20 percent, according to the report, published by recruitment firm Robert Half (RHI) today. More than half the survey participants expressed concern the limits will create an “unstable” cost structure.
Two in Three U.K. Financial Services Raise Salaries, Survey Says
U.K. Chancellor of the Exchequer George Osborne opposed the curbs, saying they would harm the competitiveness of the nation's finance industry. Photographer: Simon Dawson/Bloomberg
The EU brokered a deal in February to ban banker bonuses that are more than twice fixed pay, a move lawmakers said would prevent excessive payouts and curb risk-taking that sparked the financial crisis. U.K. Chancellor of the Exchequer George Osborne opposed the curbs, saying they would harm the competitiveness of the nation’s finance industry.
“With the U.K. competing with other international centers for the world’s top financial-services talent, firms will need to strike the balance between risk and reward, with additional employee remuneration potentially creating an unstable cost structure,” Neil Owen, global practice director at Robert Half Financial Services, said in the statement.
Thirty-eight percent of participants said they were “very concerned” about losing staff because of the bonus caps, while 55 percent were “somewhat concerned.”
HSBC Holdings Plc (HSBA), a London-based bank that makes most of its profit in Asia, said this month it would consider raising salaries to ensure its remuneration remains competitive.
Robert Half said it surveyed 100 U.K. chief financial officers and chief operations officers in June and July.
To contact the reporter responsible for this story: Ambereen Choudhury at [email protected]
Probably - it'll create a less competitive environment since bonuses are capped; plus since your base is higher, obviously a bit less incentive to perform.
Any time you cap bonuses, you basically discourage performance past a certain point. Sure, you may reduce risk by a little, but banking in general encourages excessive risk taking.
As a junior employee: DEFINITELY!
As an actual dealmaker: HELL NO!
Can you move around as a higher-up from office to office or firm to firm?
I.E. Tranfer to America or get hired by a firm in America?
I don't know Cool approach though. Guaranteed higher pay as a junior banker, then jump ship to America and get the higher bonuses once you reach VP/MD level.
Of course I'd want more salary if my bonus would be capped.
But should a bonus cap be implemented? Of course not. Verminous socialists...
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