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Government bonus tax fails to stop investment bank payouts

BANKING bonuses have soared over this financial year, demonstrating a stark failure by chancellor Alistair Darling to rein in hefty City payouts through the new Bank Payroll Tax.

Of those bankers and finance workers who have already had 2009 bonuses confirmed, 57 per cent said their payouts had increased, according to a survey by eFinancialCareers.com.

Almost two thirds of respondents added that they had also received a boost to their fixed compensation in the past twelve months, with the average salary increase standing at 26 per cent. The news comes after several high-profile investment banks – including Credit Suisse, UBS and Deutsche Bank – all made the decision to increase salaries to offset the impact of the crackdown on bonuses.

Wealth managers, private bankers and those working in trading and fixed income received the largest average bonus payouts this year, according to the new data, while the sectors showing the biggest salary increases were fund management, research and trading. Although the tax has had a limited impact on the bonus culture it was intended to curb, the survey found new fiscal measures had a profound effect on the City’s position as a desirable place to work.