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Top City bankers were nervously comparing notes today amid fears that year-end bonuses are set to shrink by at least half.
Morgan Stanley and Goldman Sachs have put their usual October meetings to decide bonus payments on ice while they cope with the worldwide financial crisis.
Most payments will be almost entirely in shares and compensation experts say that the City's £8.5billion bonus pot last year is likely to be halved at least.
Although news of the falling bonus payments is unlikely to provoke much sympathy, many City staff rely on year-end bonuses to fund day-to-day expenses.
A slump in bonuses is likely to hit London house prices.
Leading figures have protested about the City's bonus culture and Gordon Brown said some bonuses were simply "unacceptable".
For a lucky few, however, there is no sign of the gravy train coming to a standstill.
The elite investment bankers at Lehman Brothers - whose collapse was perhaps the most shocking failure of the credit crunch - have been offered large cash bonuses just for staying with the company until autumn 2009.
Nomura, the Japanese bank which has just bought Lehman's European and Asian arms comprising about 2,500 staff, wants to lock in those it regards as vital.
One banker who had been offered the payment told the Financial Times: "I think it's attractive."
Reader views (12)
Let's see. Take last year's bonus of roughly sweet b*gger all, divide by two, and that makes, errmmm, roughly the same, so does that mean I'm better off? Not everyone who works in the city gets any sort of bonus, let alone the 8 figures that the red tops like to stoke public ire with. The big problem is the 'guaranteed' bonus that got introduced in the early 70sm where new teams were lured with bonuses whether they made money or not. It was normally not, but they still got paid ahead of the footsoldiers who actually made some money. A bonus should be a bonus, not just a salary add on, and should be worked out on a clear and easily understandable formula.
- Paul, London, 29/09/2008 09:00
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Let's be clear about bonuses. None should be taken for granted,my definition of bonus is something paid over and above what is due - usually in appreciation for the good performance of a job. I take on board the posts that not all 'City' workers were involved in securitisation and sub-prime,but, senior bankers who conveniently turned a blind eye when the money rolled in do not deserve to be rewarded for their incompetence.
- Paul, Kent, 26/09/2008 16:52
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Nick, just because you've lost money on your house, doesn't give you the right to dictate what anyone else should or should not be paid. It's actually none of your business.
- M, London, 26/09/2008 14:11
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while people's frustration is understandable, consider 2 things: (1) only a small fraction of city workers were involved in securitization or investing in MBS, CDOs etc., why are is the public so bitter about the pay of the rest who worked 80+ hours per week? (2) the distinction between bonus and base salary is artificial, reducing bonuses to 0 is equivalent to someone cutting your pay by 30-50% - I wonder how happy some of you would be about that?
- Jonathan, London, 26/09/2008 13:36
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Halved? Oh, that means only a £5,000,000 bonus then.
- Phil Jones, London UK, 26/09/2008 13:31
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Hello London,
My belief over the years on bonuses is this, you do well and get rewarded on top of your wages or dividend, do badly and forget the bonus. Can anyone tell me please when this changed?.
The style of management today rewards people highly for failure, not bad of you can get it, and the company which once owned the one I work for now back in 2004 the top table ripped everyone off ringfenced there pensions gave themselfs golden handshakes called in the administrator and walk off into the sunset....rich, and thats for failing.
The rules are being breached all over the place, in politics, in bussiness,and in industry and banking, and yet we see yet again the toothless side of regulators who just can't bite.
This has got to stop and stop now, we have a culture in Britain and across the globe that is putting the general tax payer to the crown at risk through no fault of there own.
Everyday greed overtakes where money becomes the be all end all material the route to all evil. The stack of cards are falling down around our daily lives and for what..... greed?.
Finally,
A line of a song by Abba, Money, money, money,must be funny in a rich mans world.....I bet it is don't you?.
- J.L., Scarborough, N.YKS., 26/09/2008 13:29
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And they wonder why their current plight evokes little sympathy...
- Iain, Covent Garden, 26/09/2008 12:50
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this must be one of those parallel Universes that the Scientits at CERN were searching for where failure is rewarded with millions of pounds.
- Tommy Cockles, Chiswick, 26/09/2008 12:41
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They should be grateful, that they still have a job!
- Triffidqueen, Desk in London, 26/09/2008 12:29
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Why are bonuses only to be cut by HALF- why not end the system of bonuses altogther. This is unbelievable- the rest of us are working flat-out, long hours, using all our professional skills & knowledge in our work- but no bonuses are available to us! We're all struggling with rising food & utility bills and many are losing their jobs/homes.
If people like working in investing banking, just let them accept a good salary- and not expect any bonus.
- Susannah, Colchester, Essex, 26/09/2008 12:13
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Halved! They should be kissing their bonuses goodbye, just as most of us are our property values.
- Nick, Leigh-on-Sea, Essex, 26/09/2008 11:26
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My heart bleeds for them!
- Sharon, London, 26/09/2008 10:35
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