While the use of guaranteed bonuses to attract banking talent is declining, using such incentives to attract critical and senior hires shows no signs of abating, according to Mark O’Reilly, director at financial recruiter Astbury Marsden...
Today’s Financial Times reports on data from lobby group the Institute of International Finance which shows that guaranteed bonuses, where employees are awarded incentive payments irrespective of performance or business profitability, accounted for 5% of bonuses in 2009, down from 10% in 2008 and 8% in 2007.
“Previously a guaranteed bonus was a relatively common way to attract a mid-senior level candidate as they were walking away from accrued financial earnings from their current employer.
“Post-financial crisis, doing this has been seen as a politically contentious issue so insititutions have been reluctant to use them for fear of negative publicity. Clients have been very cautious about using guaranteed bonuses in all but the most senior/strategic hires. Senior candidates will not move without them as you would be asking a director-level candidate to be walking away from six-figure sums.”