By Neeraj Gangal
Fixed-income bonuses to be more hit; banks to focus on well-performing departments.
UAE bankers expect their bonuses for 2009 getting hit by the current credit crisis, according to a report.
The emirate’s bankers estimate close to 40 percent cut in the bonuses that would be payable to them in 2010, when compared to 2008, UAE-based Emirates Business daily reported on Thursday.
Adel Al Alawi, CEO of GulfBankers, told the daily: "Bankers are being realistic this year, acknowledging any bonus is to be significantly smaller than in past years. The large payouts we have seen previously are history in 2009. Of course, there will always be exceptions.”
"The amount of bonus to be paid this year will be 40 percent less than last year."
Emirates Business said that fixed-income bonuses will be particularly hit and focus will be on well-performing departments and retaining valued talent.
According to the daily, Panos Manolopoulos, managing partner Middle East at Stanton Chase, also believes we may see a 30 to 40 percent drop in bonuses.
However, employee salaries in the UAE are predicted to rise by up to 7.5 percent in 2010,
according to a new survey
of more than 100 companies.
The survey from the global HR consulting firm Mercer revealed that most firms (90 percent) said they will be raising salaries in 2010.
The Total Remuneration Survey (UAE) of more than 100 firms with close to 23,000 employees said base salaries will increase by between 7 and 7.5 percent in 2010.
Why are they even getting bonuses? Maybe for the great investments that they have made and the beautiful bubble they built?
Agree with Karim, this is totally unfair.
What people have always failed to understand about finance is this: the compensation for finance professionals is MOSTLY bonus. In other words, the base salary tends to be low with an unwritten expectation of high bonuses to compensate for the low salary. When I started out as an investment banker, my total compensation was $85,000; In absolute terms it seemed decent, in hourly terms it equated to $13.5/hr only. My hairdresser earned more per hour than I did. I have since left banking, for something that pays more per hour :) Bankers continue to get bonuses because finance companies prefer not to have massive fixed salaries and to force retention (you wont leave midyear, since you want your bonus cheque). This however is changing in the west, as salaries are shooting up substantially. So the change, from the perspective of the torches and pitchforks mob, is actually worse. For the bankers its better since they get more cash upfront, with less uncertainty. Although I'm interested in knowing who the heck got sizeable bonuses in 2008 anyway (when firms didnt care if you left)? 40% decrease from zero isn't much, is it?