We started the year with fresh promise of increased deal flow and larger analyst classes within the investment banks.  Following a summer of discontent we were eager to see the impact on bonuses for analyst and associates on a summer cycle.  With rumours of yet further rounds of redundancies and growing pessimism in the markets, bonuses across the banking sector were sure to be heavily impacted.

Or were they?  Once again this summer, when many of the investment banking analysts got their annual reviews and bonuses, we have seen base salaries at or around the same level as 2010.  Bonuses however, have seen a little uplift on last year with a wider gap between different levels of ranking.

In some cases banks were awarding bonuses of up to 130% for top ranking second and third year analysts.  This is clearly the banks’ attempt to retain talent for longer as the wave of analysts and associates moving towards private equity was more apparent with the promise of greater deal exposure and a more a hands on experience. These bonus levels were only awarded to 3-5 top ranking analysts out of classes of circa 35 in the UK; further tightening the competition for that elusive bonus and upping the stakes for being a top performer. 

Do banks expect greater loyalty for the reward and is it impacting on analysts’ decision to move? 

The answer is yes, the healthier bonuses mean that analysts especially from the class of 2010 are thinking twice about making the transition so soon compared to their peers a year ago.  More...

After a challenging year in terms of mandates, the announcement of the investment banking analyst bonuses and pay reviews this summer was eagerly awaited. There was speculation on whether base salaries for 2010/2011 would be maintained at the same levels as last year when there was a significant uplift, or if they would be increased again.

In the event, there was no uplift for analysts.  The analyst base salaries remained at or around the same levels as last summer.  Bonuses were also more conservative this year with an average of 50% for first year analysts, 70% for second year analysts and 90% for third year analysts.

We’ve seen evidence of dwindling numbers of second and third year analysts, with significant departures early on in the year and following the summer bonuses, as private equity funds began to pick through the star analysts within the banks for the first time in a year.  The new analyst intakes have nearly doubled for 2010/2011 in an attempt to compensate for the reductions in team numbers in a market quickly gaining momentum. Salaries for analysts starting now, i.e. class of 2010 are in the range of £40,000 to £45,000 across the major banks. More...