[LONDON] Senior workers in London's financial services sector are expecting on average a 21 per cent rise in their bonus payouts for this year, despite pressure from regulators and lawmakers for payouts to be reined in, a survey showed on Monday.
Managing directors predict their bonuses will rise to an average of 124,680 pounds (US$195,000), bringing the bonus element of their pay as a proportion of base salary up to 60 percent from 54 per cent for last year, according to recruitment firm Astbury Marsden.
Politicians have been trying to crack down on generous bonuses in financial services following the credit crunch. Many blame such incentives for encouraging excessive risk-taking, which destabilised banks that then needed to be bailed out.
The European Union has sought to deter such behaviour with a new law that limits a bonus to no more than 100 per cent of a banker's fixed salary, or twice that level with shareholder approval. It will apply to awards for performance in 2014 that are paid in the new year.
Astbury Marsden said improving market conditions over the past year had led to an increase in the proportion of all City of London workers who expect to see their bonus increase in 2014. However, it warned some may be overly optimistic. "Despite shareholder and public pressure to limit bonuses and with the EU bonus cap now set to be introduced at the start of 2015, City staff clearly feel that their employers are in the position to reward them well," said Astbury Marsden Director Adam Jackson. "But even though conditions have improved recently, some staff may find themselves disappointed in the upcoming bonus round," he added.
Bonuses for Britain's bankers and insurance workers rose at double the pace of those for the total workforce last year.