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City bankers expect to receive an annual bonus worth approximately a quarter of the compensation forecast by employees at private equity firms, a survey released on 4 January showed.
According to data published by recruitment group Astbury Marsden, investment bankers in the UK capital expect to receive an average annual bonus for 2016 worth £24,461($36,000, €33,300), compared with an average bonus of £104,125 ($152,000) predicted by their private equity firms counterparts.
The survey, which covered 1,000 City of London staff, also found that wealth managers and private bankers expect to receive an annual bonus worth on average £59,196 ($87,000), amounting to about 60% of their salary.
Astbury Marsden added the average bonus expectations for the employees surveyed was £23,196 ($34,000), with staff at in investment-management businesses and at corporate and stockbroking firms expecting a bonus of £27,525 (£40,000) and £27,071 respectively, while commodities traders forecast their bonuses to be around the £26,939 ($39,000) mark.
Adam Jackson, managing director at Astbury Marsden, highlighted how, despite lowering their expectations, investment bankers might still be left disappointed by their bonuses, as the sector comes to term with tougher capital requirements, while bonuses have been capped at twice the annual salary.
"Investment banks could risk an outflow of key personnel if they are tempted away by the comparative largesse of private-equity firms," he said. "EU rules capping bonuses will have had a large part to play in this, but many banks are also reining in payments as profits remain under pressure.
"Private-equity firms are not necessarily bound by the same strict rules on bonuses, and this is reflected in workers' far higher expectations."
In October 2015, Deutsche Bank, one of Europe's biggest lenders, revealed it could cut the bonus pool at its investment banking division by as much as €500m (£367m, $543m) in a bid to keep costs under control.
Late in November 2015, John Cryan, the bank's co-chief executive, said bankers were earning too much and that many of them were promised a bonus too easily.
"Many people in the sector still believe they should be paid entrepreneurial wages for turning up to work with a regular salary, a pension and probably a health-care scheme and playing with other people's money," he said.