Twice as many London bankers fear the dreaded “donut,” or zero bonus, in the current pay season compared to a year ago, according to a survey released yesterday.
Financial services recruitment firm Astbury Marsden said a poll of bankers in London showed 22 percent are not expecting a bonus of any kind from pay awards covering last year’s performance, compared to 11 percent a year ago.
Regulators and politicians are taking a harder line on excessive pay, and Astbury Marsden said 44 percent of those polled said this was negatively impacting their pay.
Banks including Barclays, Deutsche Bank, UBS and Goldman Sachs are also keen to cut costs in a tough environment and show they have learned lessons from the past, which is putting pressure on pay.
The Centre for Economics and Business Research predicts bonuses for last year in London’s financial sector will more than halve to £1.6 billion (US$2.5 billion) from last year, and will keep falling until 2015.
Bonuses — typically paid in February and March — will be down 86 percent from the record £11.5 billion paid out in 2007-2008, the center said.
Bonuses still make up a big percentage of pay in the industry, and managing directors expected them to be worth 88 percent of their base salary.
Almost half of those surveyed said they would look to change employer if they were unhappy with their bonus, the number of those who would look to move overseas fell to 14 percent, half the level of two years ago.
A separate survey released yesterday said a third of London financial workers expect their base pay to rise this year, as firms try to attract and retain the best talent.
Recruitment firm Morgan McKinley said 57 percent of financial workers it polled expected compensation to remain relatively flat this year and 33 percent expected a pay rise of up to 10 percent. Half of those expecting an increase cited firms’ need to attract and retain the best talent as the main reason.
Morgan McKinley said there was a 36 percent drop in registered job vacancies in financial services last month from the previous month to 1,323 positions.
It said it expects a pick up this month, as a seasonal slowdown last month was compounded by some banks postponing hiring until the new year.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud