London Bankers Bracing for Leaner Bonuses Than New York [Poor Dears]
Bankers in London, the hub for securities firms in Europe, are bracing for lower bonuses compared with New York counterparts as earnings from the region plummet and pressure to tighten compensation mounts.
Investment bankers and traders at European banks should expect at least a 15 percent cut in pay this year, while U.S. lenders may leave compensation unchanged, three consultants surveyed by Bloomberg said. That’s because bonus pools at European banks may be reduced by as much as half, while those at U.S. firms, which can cushion the impact of falling fees in the region with earnings from home, may fall 20 percent, they said.
‘The real split is coming, and we will see the quantum divide this year,’ said Tom Gosling, a partner at PricewaterhouseCoopers LLP in London, referring to the difference in pay between the two financial centers. ‘U.S. regulators don’t have the same obsession with pay structures that European regulators have.’
While lower pay for all bankers reflects what may be a temporary drop in business, cuts at European lenders probably will be structural rather than cyclical, cementing a two-tier system, said John Purcell, chief executive officer of Purcell & Co., a London search firm. They also could spur some employees to relocate, according to recruitment company Astbury Marsden.
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