Whether or not this year's bonuses are as generous as they might be, the cash element is likely to rise.
Adrian Kinnersley, head of the financial services practice at recruitment firm Astbury Marsden, says many of the banks he works for are preparing to offer all-cash bonuses for staff from analyst to director level.
For analysts and associates, bonuses comprised entirely of cash are nothing unusual - although HSBC is rumoured to have paid all-stock bonuses to many investment banking staff in the 2002 downturn. But when payouts exceed around 100,000, the proportion paid in deferred stock increases.
Not this year, says Kinnersley. With the market for mid-ranking people tighter than ever, he says cash payouts will be prevalent for vice presidents (VPs). "There's a lot of movement and banks need to keep people happy," he explains.
Deutsche Bank set a precedent for cash payouts last year, cutting the stock element of its bonuses to 15% or less. Recruiters say the move went down well: "It was a gesture of goodwill and they didn't get much turnover as a result," says one.
This year banks may not make the cash accessible immediately, however. Paul Hunt, managing director of recruiter Healy Hunt, says some tier two European banks are concocting schemes whereby bonuses will be paid in cash, but deferred over two or three years. "Banks are so panicky and frightened about losing staff, they will do anything to retain them," he says.
Deferred payouts could end up doing the opposite. Dresdner Kleinwort deferred bonuses for its equity prop trading staff last year, causing disgruntlement in the process. "Deferring cash bonuses would be a very strange thing to do in such a candidate-driven market," says Kinnersley.