In a surprising twist for a year overshadowed by the Covid-19 pandemic, bankers’ bonuses and comp payouts in early 2021 will be higher across the board from 2020.
“Overall, revenues for financial institutions in 2020 have been relatively strong, but we should be very careful to not correlate this positive trend with a corresponding huge uptick in bonuses,” said Michael Karp, Options Group’s Chief Executive Officer.
This is the forecast according to insights and data in the new 2020/2021 Global Financial Markets Overview & Compensation Report from Options Group, the preeminent Wall Street talent acquisition and development firm.
The theme of this year’s report is “Navigating Compensation Challenges and the Future of Work During Covid-19.”
“The pandemic has tested the resilience strategies of our systems of governance, the depth of trust in our organizations, the strength of our cultures, the reflexes of our leadership, even our conceptions of our brands.
“That said, it has also provided organizations a new opportunity to think differently on how to assess, manage, develop and retain their talent in the midst of this pandemic and how to achieve their overall goals,” said Karp.
The report is available on December 2, 2020, and was compiled based on data available between January 1 and November 5, 2020. Prior year reports have long been used by global HR heads and C-suite members as a vital tool to advise on comp payouts and trends across the entire financial executive compensation landscape.
Options Group forecasts global total compensation to increase for almost all lines of business over the same period last year.
Compensation will increase for FICC, Equities, Investment Banking, Electronic Markets, Quantitative Strategy, Risk and Compliance, Information Technology. Comp for Private Wealth Management will largely remain flat.
The report is based on internal year-over-year percentage change data gathered from a survey of managing partners and product team leaders in the U.S., EMEA, Asia, Latin America, Australia, and India. The compensation reviewed is for Managing Directors, Directors, Vice Presidents, and Associates.
For 2020/2021, the forecasts for the average YoY changes in global compensation are as follows:
- Fixed Income, Credit, and Commodities is up by 9.1%
- Equities is up 7.2%
- Investment banking is up 3.5%
- Electronic Markets is up 7.4%
- Quantitative Strategy, Risk, Compliance, and IT is up slightly 1.1%
- Private Wealth Management is flat at 0% change from last year
Key regional compensation and hiring trends this year include:
- In the U.S., compensation for those working in FICC will see the biggest increases over 2019, with Credit projected up 17.8%, Rates up 13.4%, and Commodities up almost 11%. U.S. equities will increase overall 9.2%, with Cash Equities up 8% and Equity Derivatives up 12.8%.
- In EMEA, the largest compensation increases will take place in FICC, with Rates up 17.5% and Credit up 13.3%. In Equities, Equity Derivatives comp will go up 2.4% and Prime Finance up 5%, while those working in Cash Equities are likely to see their comp virtually untouched with no changes.
- In Asia, FICC will see a YoY comp increase at 4.1%, with compensation in both Foreign Exchange and Rates up 5.6%. Asian investment bankers may see modest increases of almost 1%. Meanwhile, those working in Asian Equities will likely see their compensation up across the board almost 7%.
The report contains exclusive insights concerning compensation structures, market overviews, key comp trends and forecasts, and information about accepted, rejected, and counter offers. Forecasts are based on results from the firm's OGiQ intelligence unit, public data such as SEC filings, and questionnaires conducted among hundreds of Options Group's global consultants.
“For most organizations, remote teams today will be far better positioned than ever before. However, giving employees a better work life balance means that inevitably there will be compression on compensation. Organizations today must simultaneously invest in digital workplace technology to allow employees the flexibility they expect in today’s world whilst also paying careful attention to their engagement. The corporate governance challenges of keeping compensation in line will be an ongoing topic in the boardroom well into 2021.” said Karp.
Media contact: Richard Stein, firstname.lastname@example.org
About Options Group
Founded in 1992, Options Group is a leading global talent acquisition and strategic consulting firm for the financial services and technology industry. Since 2000, we have maintained a local presence on five continents and have placed over 16,000 mid- to senior-level professionals in all areas of the financial services industry at a range of institutions. With more than 175 consultants and market intelligence professionals worldwide, Options Group has a thorough knowledge of key competencies in the financial industry and is at the cutting edge of global hiring services and compensation trends for securities, investment banking, hedge funds, asset management, and information technology.