Top bankers' salaries rise by up to 25pc
Average basic pay for investment banking and fund management staff in Hong Kong rose by 15 per cent to about HK$890,000 this year, but overall compensation is expected to drop because of smaller bonuses.
In a survey of 630 investment banking and hedge fund staff in Hong Kong, Astbury Marsden, an international financial services recruitment firm headquartered in London, discovered that pay rises for staff in Hong Kong outpaced those for staff in London, who saw average rises of 12 per cent over the same period.
The research showed that the biggest pay rises went to staff at managing director level. The increases were as much as 25 per cent, to approximately HK$2.5 million a year, if senior staff switched employers this year.
'Generally banks are keener to invest in their teams in Asia than in Europe and the US and that has meant a bigger boost for Hong Kong bankers' base pay,' said Mark O'Reilly, managing director of Astbury Marsden Asia Pacific.
However, most of these pay rises were agreed earlier this year when confidence in a recovery was strong. More recently, pay increases have been rarer and more modest, and the strong growth in salary might not be repeated next year, O'Reilly said.
In addition, even though base salaries have risen, bonuses remain unannounced. Banks have been increasing base salary in order to retain staff, and after government bail-outs during the financial crisis, investment banks have been put under pressure to cut down on their bonus payouts.
'No one's expecting bonuses to be great this year,' O'Reilly said, adding that overall compensation in the finance sector will probably drop.
With the global economy still suffering and as the year comes to an end, investment banks have also slowed down their hiring or put a headcount freeze in place. But some hedge funds that have performed well are still recruiting.
Staff at analyst level saw an average 20 per cent pay rise to HK$400,000 a year if they switched employers. Staff who stayed with their current employer and did not receive a promotion received an average pay rise of 9.5 per cent.
O'Reilly said the reason senior staff pay increases surpassed the increases given to junior staff was because some banks and hedge funds were facing a shortage of trained and capable junior to mid-level staff after they cut their graduate or MBA intake during the financial crisis.
Staff working in compliance teams, which make sure the banks meet regulatory requirements in their operations and products, reported the biggest pay rises.
Compliance team staff said they received an average 21 per cent boost in salary. This was higher than the average 11 per cent pay rise among counterparts in London.
Hong Kong banks have been expanding their product lines in the past few years. This created a surge in demand for compliance staff to ensure new products were properly monitored. Regulatory oversight in the city also became more stringent, O'Reilly said.