In its latest study, based on 648 VP working at London investment banks, Emolument.com looks back at 2016 bonuses. M&A bankers did not benefit from their 2015 record deal volume yet, with bonuses down 20% from the previous year across the market. Yet they remain the highest paid City professionals in 2016, thanks to decreasing and stagnating bonuses in origination and trading.
2016 median bonuses
- M&A bankers did not all benefit from a record-breaking 2015: some M&A bankers were surprised to discover their bonus was down 20% and more compared to 2015, even though the volume of deals for that year was the highest ever recorded*. A bonus increase is to be expected in 2017, when most of the M&A deals will have closed and fees have been paid.
- …but they’re still doing better than everyone else ! With traders’ bonuses unchanged from 2015 (£65,000), and origination professionals’ down by 30%, M&A bankers earned the biggest bonuses in 2016 (£80,000).
- Not good enough: sales and research professionals’ bonuses still don’t come close to M&A bankers’, despite an uptick in 2016.
Different banks, different bonuses
|Top 5 banks by European M&A revenue*||£100,000||£125,000||+25%|
*BAML,Goldman Sachs,JP Morgan, Lazard, Morgan Stanley.
- It all makes sense : the best performers of 2015 on the European M&A market did actually boost their staff bonuses by 25%, up to £125,000 for VPs. On the other hand, those which did not have access to the recent spate of super deals and super fees cut their M&A bankers bonuses by 16%.
Were bankers happy with their 2016 bonus?
(% of professionals who said they were happy with their bonus)
|Origination & Syndication||26%||17% (-9)|
|Institutional Sales||17%||29% (+12)|
- An unhappy bunch: most bankers are unhappy with their bonuses. Traders, despite having the second highest bonuses in these rankings, are among the least happy of banking professionals (only 23% of them were happy with their 2016 bonus).
- What did you expect? After seeing their bonuses decrease by 30% from 2015, only 17% of origination professionals were happy with their 2016 paycheck.
- M&A : wait & see. Even though their bonuses dropped sharply from 2015 (-20%), M&A professionals’ satisfaction remained at a similar level (38% in 2015 vs. 40% in 2016). The drop in their bonus might have been easier to swallow knowing they can expect a much higher one in 2017. If that’s not the case, their satisfaction level is likely to plunge.
Alice Leguay, Co-Founder and COO at Emolument.com said:
Over the last couple of years we have seen a huge polarisation in bonuses especially in mergers and acquisition. This applies to specific banks: those who have access to the high flow of deals and fees, versus the non-performing banks in M&A. This polarisation also applies to individuals with banks choosing to either give out “doughnuts”, ie: zero bonus, and retain resources in order to pay outstanding professionals outstandingly well.
*Source for top banks in European M&A : http://markets.ft.com/data/league-tables/tables-and-trends/mergers-and-acquisitions