City salaries and bonuses slashed

Pay and bonuses across the City are being slashed as firms rein in excessive rewards, new research has shown.

Around 68% of City professionals received a bonus for 2012, down from 82% a year earlier, according to figures from recruitment firm Morgan McKinley.

Salaries are also under pressure, with only 36% of City workers getting a pay rise compared with 47% a year earlier.

The findings echo cuts by major finance firms, which have been slashing variable pay in response to public outrage over misdemeanours and squeezed profits.

HSBC cut its bonus pool as a percentage of pay after being fined a record 1.9 billion US dollars (£1.3 billion) last year after revelations that it allowed rogue states and drug cartels to launder billions of pounds through its US arm.

Barclays also reduced bonuses by 16% in 2012 and cut fixed pay by 7% after being fined £290 million for rigging the Libor rate.

The research showed 27% saw their bonus fall, while 22% received a bigger bonus. Another 41% said their bonus was unchanged. Only 36% were satisfied with their bonus, compared with 42% last year.

However, proposals for a European bonus cap look unlikely to drive finance workers out of the City, the research showed, with 83% saying they would stay despite a limit.

Hakan Enver, operations director at Morgan McKinley Financial Services, said: "There is a much greater acceptance of the downward pressure on cost management and the knock-on effect on overall reward.

"The underlying theme from all of this research is the culture change across the City which was synonymous for a long time with high rewards. Those receiving bonuses are now fewer in numbers, the amounts being paid out are dropping and individuals are less satisfied."