You were not shy in coming forward with your bonus shouts. And clearly optimism is in the air as we approach year-end. This year has been a good one for most firms. Some folks, of course, won't have long to wait to find out just how big this year's bonus will be. Goldman, Lehman and Morgan Stanley are usually the first among firms to advise bonus numbers, and their staff should be in the know by this time next month.
In the meantime, we'll share with you, in general terms, your shouts on the size of this year's bonuses.
By far the most bullish staff are those who work for the larger US investment banks. In front office, expectations are high on the commodities trading front. Those who earn a crust selling services to hedge funds also expect to be well rewarded this year. Fixed income traders expect to be marginally better off this year, although equity traders feel they will see bonuses up around 20% on 2004. Investment bankers are more cautious. Although 2005 has been a better year for M&A, only those who can demonstrate that they brought in the big money are expecting to be well rewarded. As for the rest, bonuses generally are thought likely to be up around 10-20% up.
Middle office staff also expect bigger bonuses this year, again up around 15-20%, but staff who work in the back office are not expecting much bigger bonuses then last year. Payouts are thought likely to be 5-10% up on 2004.
There is also a big gap in expectations among European firms. Staff at the big boys are bullish, and expect bonus payouts in line with US rivals. The medium and smaller firms are less confident that bonuses will be, on average, more than 10% up on last year. Staff here expect there to be bigger bonus pots than 2004, but fear that the spoils will go mostly to strong performers, leaving the rest with the scraps.
Staff who work in fund management and private banking also generally expect to have a better year this year. Bonus expectations are higher than last year, but only by 10% on average. Again, many expect that a large proportion of the bonus pool will be paid to those who have performed.
So, the message is clear. If you have brought home the bacon this year, you will do well come bonus time. And even the 'great unwashed' (the 90% of staff who work in the financial markets) should do better than in 2004. But don't get too carried away. For the majority, 2005 will probably be remembered as a decent year for bonuses, rather than a great one.