Investment banks slashed the 2011 bonuses paid to staff in Asia by 30 to 40 per cent from 2010 payouts, and scrapped some non-cash benefits including housing allowances and free home leave for expatriate employees.
The cuts come as a weak trading environment and a thin pipeline of deal making cloud the earnings outlook for the current year.
According to financial industry sources, most major investment banks including Morgan Stanley, Citigroup, Bank of America Merrill Lynch, and Deutsche Bank, announced sharply reduced 2011 bonus plans to staff in the past few weeks.
European investment bank Credit Suisse announced its bonus plan to Asian staff on January 30 and the total bonus payout was cut by slightly more than 40 per cent compared with its 2010 bonuses, sources told the South China Morning Post.
Morgan Stanley announced its bonus plan late last month and the bonus pool was cut by about 30 per cent. The Wall Street bank also told staff that cash payouts would be capped at US$125,000 and above this level they would be paid in cash and stocks.
Staff at Citi, the world's largest financial services group before it was badly hit in the 2008 financial crisis, saw their bonus pool cut by around 30 per cent as well.