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Banks rethink use of bonus to recruit talent
INVESTMENT banks are moving away from offering “guaranteed” bonus packages to entice new recruits, according to a new report.
Of the 37 financial institutions surveyed by the Institute of International Finance, only five per cent of bonuses handed out in 2009 were guaranteed.
The figure represents a drop from 2008 when 10 per cent of bonuses were guaranteed and 2007 when eight per cent were of the same nature.
A guaranteed bonus promises a fixed incentive payment despite an individual’s performance or the profitability of the company.
The survey indicates that the investment banking industry has almost entirely stopped handing out the controversial bonus.