Most investment bankers in Hong Kong are paid more than their counterparts in Singapore, some as much as two-thirds more, a poll indicates.
Headhunters believe this is to compensate those in Hong Kong for the city's tough work environment.
Apart from having to put up with Hong Kong's urban jungle and pollution, the bankers have to cope with extreme competition when it comes to stockbroking and underwriting of initial public offerings, they say.
Excessive work pressure is thought to have contributed to a 33-year-old JPMorgan Chase employee in Hong Kong jumping to his death last week. He had told a colleague he was suffering from work-related stress.
A poll of 236 investment bankers in Hong Kong and Singapore by Emolument.com  a British-based website that studies salaries and bonuses in the financial services industry, found that total compensation for Hong Kong's investment bank associates, who are one notch above entry-level analysts, is 68 per cent higher than in Singapore.
Managing directors in Hong Kong, who receive an average annual package of US$766,000, earn 37 per cent more than those in Singapore. But directors in Hong Kong, those ranked just below managing directors, make 20 per cent less than their peers in the city state owing to a decline in their bonuses.
Demand for staff is higher in Hong Kong, where investment banks are continuing to hire to comply with regulatory change, while banks in Singapore have been sending some jobs offshore, recruitment firm Morgan McKinley says. It also notes a movement of banking professionals into other industries in Singapore.
Headhunters say that while demand for frontline staff has moderated in Hong Kong, opportunities for legal and compliance experts have been growing steadily as a result of regulatory scrutiny of hiring practices in Asia and the manipulation of Libor and other key benchmark interest rates by global banks.
Because of more stringent capital requirements, global investment banks have had to give up risky but lucrative proprietary trading desks and sell their physical commodities trading units, triggering a wave of job reductions in those areas.
Consulting firm McKinsey said last year that the average return on equity of the world's 13 biggest investment banks could fall to 4 per cent by 2019, from 10 per cent in 2012, if the banks did not take decisive cost-cutting measures.