City bosses are upbeat about their bonuses in 2016 but a study by recruiter Astbury Marsden says that optimism might be misplaced. More than a third of UK finance workers say they expect an increase in bonuses, but recruiters warn of pressures to keep bonuses under control this year.
Astbury Marsden MD Adam Jackson said in the report: "This optimism is being severely tested. The current state of the market suggests that such positivity may be unjustified." Managing directors and partners at financial firms are the most confident. They are expecting their bonuses to be 61% of their salary.
With the financial sector still under scrutiny after the crash in 2008, the report said there is continuing pressure from politicians as well as shareholders to curb the pay-outs. However, directors (executive as well as non-executive) are still expecting a bonus worth 37% of their average salary.
Despite many investment banks struggling, with severe job cuts expected in 2016, investment bankers are still expecting a bonus pay-out worth a quarter of their annual salary.
Another report, publishing by PWC on 25 January showed that non-executives could expect the slowest increase in fees since records began. In 2015, the earnings edged by 3% on average, while 2014's increase was 7%.
PWC suggested that the low pay increases are a result of companies trying to keep management's salary in line with the wider workforce. This caused the non-executive directors (NED) fee increases do be more gradual, said PWC partner Fiona Camenzuli.
"The environment has changed and boards are mindful of the broader debate on fair pay and the likely impact on their reputation and brand. Although it remains to be seen if this trend continues when companies review fees in 2016."