It's well known that European houses pay their investment bankers less than US banks do. This year that gulf may be bigger than ever.
While Europe's M&A markets are booming, only UBS, Deutsche Bank and Credit Suisse have really been in a position to capitalise on the continent's surge in dealmaking, says Reuters.
At the same time, figures from Dealogic suggest that fees earned so far this year by the European banks Dresdner Kleinwort, BNP Paribas and ABN AMRO have fallen as a proportion of those earned by the bulge bracket.
Both ABN AMRO and Dresdner have rethought their investment banking strategies over the past 12 months to focus more closely on key relationships. Profits in ABN AMRO's global clients division, which includes investment banking, fell seven per cent in the nine months to October. Dresdner saw profits at its investment and corporate banking arm fall in the third quarter.
Europe's second (or third) tier banks are infamous for paying less than the big US houses. One headhunter says the global head of financial institutions group (FIG) banking at one of the houses named above earned €900,000 (608,000) last year. "At a US house he would have earned $5m (2.6m) up," she reflects.
But headhunters say Europe's banks are alert to the need to reward their top performers. "There's a noticeable difference between compensation for top performers at leading banks and second tier houses," says Aiden Kennedy, a consultant at search firm Christian & Timbers. "But people who hold the key relationships will be well paid."
There are some areas in which headhunters Europe's less significant institutions may even pay on a par with US competitors. These include leveraged finance, where big balance sheets can be used to maximum effect, and real estate banking, which has taken off this year.