Working for a Citigroup or JPMorgan? You may be earning hefty fees for your employer. But will you see them reflected in your bonus?
Universal banks may top the tables when it comes to raking in fees, but headhunters say the bankers who earned them will not necessarily see as much upside from their efforts at bonus time.
This is partly because investment banking teams at universal banks are typically bigger than those at pure investment banks.
According to the head of one financial services headhunter, banks like Citigroup have up to 500 people in their European investment banking teams, spanning everything from client coverage to equity capital markets, leveraged finance, and M&A. By comparison teams at Goldman Sachs and Morgan Stanley are thought to be sized between 300 and 350 people.
Fees at universal banks are spread more thinly. "Each product is embedded in the matrix and there's a big fight over the pot at the year end as everyone claims to have touched revenues," says the European head of one international headhunting firm.
Shareholders at universal banks can also be more demanding, says Davide Taliente, head of European banking at consultant Mercer Oliver Wyman. "In organizations that commit their balance sheet to support the corporate finance business, it's only fair that shareholders take back some of the fees," he tells us.
The big banks deny this is the case, however. Although Citigroup declined to comment, a spokesman for JPMorgan points out that fees earned at the investment bank were up 42% year on year in the first half of 2006, and that performance related compensation was up 35% over the same period as the bank put money aside for end of year bonuses. "It's our goal to retain talent," he tells us. "And we will pay competitively."
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