First bank announces bonuses and there is disappointment
In what may be a bad omen for the 2019 bonus round, a first bank has announced its bonuses for 2019. And there are some complaints.
"Bonuses are 20% lower in absolute terms compared to the previous year," says a senior investment banker at RBC Capital markets, which announced its bonuses today. "People here are not happy," he says. "As a percentage of fixed compensation, it seems bonuses are down significantly."
RBC didn't immediately comment on the size of this year's bonus pool. However, the disappointment in some areas of its business may be matched by exuberance elsewhere: the Canadian bank's fourth quarter results suggest it spent $2.4bn on compensating its capital markets staff this year. This was roughly the same as last year, despite cuts to both the London analyst and associate class and to the equities business globally. With bonuses spread around fewer staff, in theory individual RBC bankers should get more.
Most other banks won't announce bonus numbers until next year, with U.S. houses typically announcing in January and Europeans in February or March. As the big days approach there is increasing trepidation that various banks will pay badly, particularly at the senior and mid-ranking level.
Recruitment firm Options Group predicted last week that bonuses will fall in all areas of the market, except U.S. credit trading and mortgages where it says they will rise a mere 2%. Options Group CEO Michael Karp said senior staff are likely to lose out everywhere, again. "There’s a year-on-year trend for taking away from MDs to pay the mid and junior ranks. This will continue, although banks will always find ways to pay their superstars.”
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