Banks double bonuses for 2016, but STILL traders and executives are not satisfied

The last two years have been tumultuous times for the world’s major interbank FX dealers, as low volatility and reduced revenues blighted corporate performance during 2014, followed by geopolitical turmoil in 2015 which added to the burden of regulatory fines and class action law suits that ran into the billions of dollars. As far as […]

takeovers

The last two years have been tumultuous times for the world’s major interbank FX dealers, as low volatility and reduced revenues blighted corporate performance during 2014, followed by geopolitical turmoil in 2015 which added to the burden of regulatory fines and class action law suits that ran into the billions of dollars.

As far as traders, associates, directors and senior executives were concerned, many of London’s bank FX desks remained stagnant in terms of employees moving to other positions, largely due to the significant staff reductions made by large companies such as Barclays (19,000 staff worldwide gone in two years, with 5,000 from the investment banking division), and also due to more favorable bonuses at certain firms compared to others.

This year, remuneration is set to rocket, however employees across the board are not satisfied, even though in certain cases, bonuses are likely to double those paid last year.

Emolument, a benchmarking site for salaries, carried out research on this matter and concluded that compensation has risen as follows this year on average:

At associate level, compensation rose from £30,000 last year to £50,000 this year.

For VPs, the figure doubled, from £60,000 to £121,000.

At Director level, bonuses rose from £166,000 to £316,000.

For Managing Directors, bonuses rose from £300,000 to £618,000 – while total compensation (including salary) rose 52%.

The research conduced that, despite the increases in bonuses, 45% of employees at Bank of America Merrill Lynch were disappointed by their bonuses, with only 26% being satisfied, representing the company with the most dissatisfied staff as far as bonuses are concerned.

Surprisingly, Credit Suisse fared similarly, which is interesting when considering that, unlike Bank of America Merrill Lynch, Credit Suisse actually issued a notice last week that it was cutting bonuses within its investment banking division by 36%, with CEO Tidjane Thiam also set to take a substantial hit to his bonus.

At Credit Suisse, the research by Emolument stated that 42% were disappointed with their bonus, whereas 27% were not disappointed.

The monetary amount of bonuses, however, is only part of the reason for discourse among employees.

Employees are also concerned about cost-cutting measures, the continual worry of redundancy when there are so many other similarly-skilled professionals also in the firing line, thus making re-employment a very competitive business, as well as technology which automates certain traditional jobs.

FinanceFeeds research reinforces this mindset, and deduces that such concerns are not new.

In 2014, traders preferred to remain at Barclays PLC (LON:BARC) despite its flagging performance as a corporation compared to rivals HSBC and Royal Bank of Scotland Group plc (LON:RBS), largely due to the employment conditions at Barclays which were preferable in terms of working environment as well as salary.

During that year, Barclays paid its FX traders much higher bonuses than HSBC and RBS despite the lower annual results and worry of redundancy, and as a result traders were not tempted to leave Barclays for its rivals.

Alice Leguay, COO at Emolument made a statement yesterday on the research:

Lack of transparency in any organisation and its culture when it comes to discussing bonuses has a huge impact on productivity.”

“No matter how much a bank pays its employees, if the process is shrouded in secrecy, the levels of paranoia and suspicion wipe off goodwill earned through higher bonus payments” – Alice Leguay, COO, Emolument.

Read this next

Digital Assets

Societe Generale launches its own cryptocurrency, EURCV

French banking giant Societe Generale has launched its own euro-pegged stablecoin, EUR CoinVertible (EURCV). This move by France’s third-largest bank reflects the increasing trend of mainstream financial institutions embracing cryptocurrencies on a global scale.

Executive Moves

Stelios Eleftheriou leaves NAGA Group to join BVNK

BVNK, the crypto-powered payments and banking platform for businesses, has appointed FX industry veteran Stelios Eleftheriou, who has a colorful career across the gaming industry, as Business Development Director (CFD & iGaming).

Retail FX

CAPEX.com introduce ETFs on UAE, Saudi stocks

Abu Dhabi-based broker CAPEX.com has expanded its asset class offerings to include a new suite of Exchange-Traded Funds (ETFs) tailored for the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) markets.

Institutional FX

Tradeweb Markets surges past $1.80 ADV in November

Tradeweb Markets Inc. (Nasdaq: TW) has reported a total trading volume of $38.2 trillion and a record average daily volume (ADV) of $1.80 trillion for November 2023. These figures mark a 59.2% year-over-year increase.

Inside View

A Mission in Accounting

Ismael Haber, an auditor and accountant, has made it his mission to help businesses improve the quality of their financial information by eliminating fraud and error. In the next five years, the demand for these specific financial services, being external financial audits, forensic accounting, and other fraud preventive and detective services is envisaged to increase.

Institutional FX

CME Group to launch new spot FX marketplace ‘CME FX Spot+’ in 2024

US derivatives exchange, CME Group today announced plans to introduce ‘CME FX Spot+’, a novel spot foreign exchange (FX) marketplace.

Interviews

FMLS:2023: Andrew Mreana provides an exclusive sneak peek into cTrader’s 2024 innovations

cTrader’s focus for the next year would be on developing new tools for Introducing Brokers (IBs) and partners, particularly those related to algorithmic (algo) trading, the company’s head of growth told FinanceFeed in an exclusive interview at the Finance Magnates London Summit 2023.

Digital Assets

Grayscale’s Ethereum ETF stalls: SEC extends review to January 2024

The United States Securities and Exchange Commission (SEC) has extended the evaluation period for Grayscale’s proposed Ethereum spot ETF.

Institutional FX

BMLL completes China equity data offering: Shanghai, Shenzhen, and Hong Kong

“Demand for China data has never been higher. This is set against a general industry trend of increased market participant sophistication, and an increasing demand for quality historic market data to understand market microstructure and venue behaviour. Market participants need to get the full picture of market quality, liquidity and order book dynamics to ultimately make better informed decisions on the markets they trade and the venues they run.”

<