PART OF PHAIDON INTERNATIONAL

USA INDUSTRY INSIGHTS

Bonus Season
Breakdown
An analysis of rewards in the f inancial sciences &
services industry and how it impacts the talent market
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Contents

03. Introduction

04. Overall results

Receiving a bonus
The structure P03.
Expectations Introduction

05-06. Industry specific breakdown

Bonus increases
Bonus decreases
Sector specific expectations
P04.
Overall results
07-11. Industry Analysis
Quantitative Analytics,
Research & Trading
Risk Management
Financial Technology
Insurance & Actuarial
P07.
Compliance Quantitative Analytics, Research & Trading
Investment Banking
Investment Management
Internal Controls
Sales & Trading
Wealth Management
P09.
Investment Management
12. Summary

13. About Us

14. Contact Us

P12.
Summary
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Introduction
In today’s ever-changing financial sciences
& services landscape, it has never been more
important to understand bonus structure. It is
a critical aspect to businesses in attracting and
retaining top talent, but also for professionals
in knowing their true worth, especially in the
macroeconomic climate we currently find
ourselves in.

For our latest report analyzing the rewards

arrangement across the finance and
banking industry, we surveyed nearly
5,000 professionals from our database
based in the US to discover the key drivers
behind their bonus payouts, as well as the
performance metrics used to determine
bonuses in the first place, and ultimately
the overall impact these incentives have on
employee satisfaction.

Offering valuable insights to both

professionals looking to benchmark
themselves, and for businesses reflecting on
their compensation strategies, both parties
can take away a number of key considerations
as the world of finance continues to evolve.

ABOUT THE RESPONDENTS

4,904 individuals from our database

participated in our bonus survey. 40% of those
surveyed are analysts or associates, with 33%
identifying as a team leader or manager. 15%
are senior leaders in their current role.

28% of those that took part in our research

have been at their current company for 2-5
years. As a leading talent partner, we often
witness three years as an average stint.
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Overall results
85% of survey respondents received a bonus
for their performance in the last year.
RECEIVING A BONUS
While the majority of survey
respondents did receive
a bonus for their performance
in the last 12 months, the
headline results for the overall
financial services industry
that took part also revealed:
• 56% said their bonus stayed
the same or decreased
• 88% receive bonuses on
a yearly basis
• 15% have not received
a bonus yet
This means there are a
number of professionals out
there who may not be as
satisfied as their colleagues
or competitors.
THE STRUCTURE
While yearly was easily the
most popular time frame
to receive incentives, we
asked for information on how
bonuses were determined in
the first place.
70% of respondents said
their bonus was a reflection
of a combination of various
factors, such as team targets,
individual targets, and overall
company performance.
Changes in the structure,
despite the financial services
industry developing rapidly
in the past few years, have
not been too common. 70%
of the survey participants
haven’t experienced any
changes to their bonuses in
their tenure, with 17% seeing
just one set of changes within
their current role.
EXPECTATIONS
43% were not happy with
the bonuses they received.
Over 50% of respondents
also said their current
bonus doesn’t keep them
motivated.
A reduced bonus is a factor
in looking for a new role for a
huge 85% of those surveyed.
It can also impact the
performance of an individual,
which could affect the
bottom line of firms.
In parallel, a higher bonus
would entice 78% of those
surveyed to accept a new
offer.
Despite these statistics,
with cost-of-living pressures
increasing and some
professionals affected by
downsizing, candidates may
be more hesitant to change
roles than expected. Jesse
Skaff, Global Client Director,
Selby Jennings, explains:
“There has been an overall
lack of attrition this year
as a result of the street-
wide performances, leaving
candidates weary to leave
one firm that may have
performed fairly and paid
a mediocre bonus to go
somewhere else that is in
a similar position.”
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Industry specific breakdown

Bonuses in the financial services sector varied significantly between sectors.

The top three sectors that received bonuses were:

91%
Insurance & Actuarial
90%
Investment Management
88%
Risk Management

It is important to note that the majority of survey respondents, 85%, still received bonuses
for their work, albeit not as heavily as above. Overall, 11% did not receive bonuses.

The three sectors that received a bonus least were:

77% Technology
81%Compliance
85%
Wealth Management

In other words, nearly a quarter (23%) of Technology professionals surveyed did not
receive a bonus at all.

The size of an individual’s bonus of course varies. Interestingly, while neither Investment
Banking or Quantitative Research & Trading appeared in the top three sectors for
receiving bonuses, the amounts were more substantial for those who did receive one,
with bonuses totaling 150%+ of base salary more likely.
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BONUS SIZE
In other words, an investment banker may have been less likely to have received a bonus in
contrast to an actuary, but if they did receive a bonus, it would have been a significant sum.

37% In comparison, 31%

of Insurance only 6% of of Investment While only 3%
& Actuarial Investment Banking of Insurance
professionals Banking professionals professionals
received bonuses respondents said instead said they took home that
of 0-10% of their their bonus received bonuses of much.
salary. was 0-10% of 50-100% of their
their salary. salary.

BONUS INCREASES
Respondents detailed their bonus increases year on year, and we can reveal both Sales &
Trading and Insurance professionals said their bonus increased the most.
Below are the top three sectors that received the biggest YOY bonus growth:

52%
Insurance & Actuarial
52%
Sales & Trading
48%
Quantitative
Research & Trading

BONUS DECREASES
And the sectors that saw the biggest decrease YOY:

33%
Investment
25% Risk
22%
Investment
Banking Management Management

A bonus decrease is never a positive, that is a given, but as demonstrated above with Insurance
and Investment Banking, the bonus amount is highly relevant.

Some Investment Banking professionals may also see their bonuses improve over time once
promoted, from Analyst to Associate, or Associate to VP, and therefore their base salary and
bonus earning potential would naturally increase, which could be behind why the sector
appears so strongly in both bonus increases and decreases.
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Sector specific expectations

Do the bonuses these financial professionals received align with their expectations though?
There were some significant differences between sectors, with Insurance once again coming
out on top; with 74% of those surveyed saying they were happy with the bonus they got.

The top three sectors who stated their bonuses aligned with their expectations were:

74%
Insurance & Actuarial
59%
Internal Controls
56%
Quantitative
Research & Trading

Some sectors were not as happy, with under half of Technology professionals satisfied with their
bonus – perhaps due to the rapid sector growth in recent years and increasing opportunities.

Least satisfied, whose expectations were not met, were:

53%
Wealth Management
51%
Sales & Trading
49%
Technology
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Industry Analysis
Discover some individual sector insights on
how bonuses can impact top talent decision
making, featuring several of our industry
experts.
QUANTITATIVE ANALYTICS,
RESEARCH & TRADING
For Quants talent, the market is still very
strong, as evidenced by the bonus data in
our survey. Senior Vice President at Selby
Jennings, Tyler Robinson, elaborates:
“Quant and Multi-Strategy were the top
performing hedge fund sectors in 2022,
so it is not surprising to see this reflected
in bonuses. It will be interesting to see if this
continues in 2023 as there have been many
geopolitical and economic events that have
provided the market volatility needed for
hedge funds to realize big gains.”
RISK MANAGEMENT
Risk Management is an interesting anomaly
in our survey, appearing both in the top three
sectors most likely to receive a bonus, and in
the top three that saw a bonus decrease.
78% of Risk Management professionals
who took part in our study also stated they
received a salary increase, implying that the
sector is seeing bonuses being absorbed into
better base pay.
If salary expectations continue to increase
from Risk Management professionals, firms
must find ways to differentiate themselves
from their competition in order to attract
key talent.
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FINANCIAL TECHNOLOGY

The global financial technology market is expected to grow and reach a market value of
approximately $325 billion by 2026. So, while the Big Tech industry may have been rocked
over the last year with reductions in headcount, the financial technology sector still has
experienced substantial growth in recent years, and therefore the future looks bright. The
market is very strong as its growth predictions show, and as the last two major recessions
have demonstrated, the industry is highly resilient.

Despite layoffs in Silicon Valley and a compensation correction across the broader market
for engineering talent, the demand for top technology talent has proven resilient. Dylan
Gomez, Executive Director at Selby Jennings explains further:

“While there has been a decrease in the number of requisitions and companies with
mass hiring initiatives, the market for top 1% professionals in Software Engineering,
Infrastructure, Cloud, and Operations Technology remains competitive. Additionally,
there have been positive effects for hiring with more passive job seekers who are
now open to new opportunities. We are also seeing our clients place a premium on
commercial acumen in addition to technical skills – so candidates coming with client-
facing experience and previous financial services experience can command extremely
strong compensation packages.”

INSURANCE

Insurance professionals have had a great bonus season, and we don’t see any signs of
a slowdown in the industry. 94% of those surveyed said they saw an increase in
their base salary as well. Taylor Carrasco, Executive Director states that due to the
increase in compensation, we’re consequently seeing an increase in professionals
looking for new jobs:

“Previously, actuaries were staying at their employer for 5+ years before moving
somewhere else. Now, they are starting a new job search after only 2-3 years at their
company. We’re seeing a higher increase in compensation for those who move
externally, compared to those who move up internally. ”
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INVESTMENT BANKING

The market has experienced another atypical

year, which follows several record years
that resulted in overhiring, increased base
compensation and high bonuses; investment
banks are cutting bonuses by 30-70%. Some
are even paying zero bonuses according to
Associate Vice President Emma Maddox:

“In comparison to previous years, strong

and talented bankers are unfortunately
being laid off, so there has been an increase
in impressive talent on the market. We are
seeing many of our clients having
tremendous success acquiring one-off and
opportunistic hires coming from top
platforms that they would not have
had exposure to previously.”

INVESTMENT MANAGEMENT

Counter offers are something we have

witnessed greatly in every sector as a leading
talent partner, and Investment Management
is no exception. When markets opened back
up after the pandemic, there was an uptick in
professionals interviewing for new roles.

But when resigning, they were given

exceptional counter offers, which has resulted
in highly inflated salaries. Investment
Management professionals still feature
prominently throughout our survey, albeit
with 22% of them seeing bonus decreases.
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INTERNAL CONTROLS

Internal Controls professionals in this survey were one of the least likely sectors to have their
bonus expectations met. As processes become more complex, the need for Internal Controls
professionals remains high, resulting in businesses needing to be able to attract top Internal
Controls talent, and fast.

COMPLIANCE

70% said they received a salary increase, but Compliance was also the highest sector to say
they received a salary decrease, similar to Risk Management. Providing internal growth
opportunities is key for organizations to retain top Compliance talent. Compliance & Legal
professionals have particularly high expectations of work/life balance, culture, and benefits,
therefore employers must be able to provide all these elements to attract the very best.

SALES & TRADING

Over 50% of Sales & Trading respondents stated their bonus expectations were not met.

A major factor contributing to decision making for professionals is bonus season as usual,
which is highly unpredictable. If a company has a reputation for changeable bonuses, whether
that is due to allocating part of the pool to lower performing units or even to encourage
some natural attrition in overstaffed teams, talent could be more likely to focus on base salary
negotiations and be more selective when interviewing.

WEALTH MANAGEMENT

Given the economic uncertainty that dominated much of the past year, Wealth Management
professionals today have a lot to consider before making a career change. However, it is fair to
say they may be more likely to make a move over other sectors after being the least satisfied
with their bonuses, with 52% saying their bonus does not align with their expectations, and 15%
also not receiving a bonus at all.
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Summary

It is well known that a good or a bad bonus season can have a significant impact on
talent, affecting both their satisfaction with their current role and their performance at
their organization. It could considerably alter the way they feel about their employer, and
could cause them to look elsewhere.

By examining the experiences and preferences of financial sciences & services

professionals across ten core specialisms, we can acknowledge the diverse perspectives
the industry encompasses, and professionals can benchmark their benefits packages
and performances thoroughly to make informed decisions about their futures.

Organizations can also utilize this knowledge to optimize bonus structures to attract
and retain business-critical talent, delivering actionable recommendations to hiring
managers in banking and financial institutions to enhance their offering and ultimately
support them in maintaining a competitive edge.

Selby Jennings can assist both businesses and professionals with their compensation
goals - identifying, sourcing, and delivering business-critical talent to the most innovative
companies across the US, Europe, and APAC.
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About Selby Jennings

Selby Jennings is an award-winning, established financial OUR SPECIALISMS

sciences and services talent partner.
• Quantitative Analytics,
Research & Trading
Whether that be Quantitative Analytics, Research & Trading
professionals developing complex financial models to improve • Risk Management
a firm’s bottom line, or Investment Management specialists
leading the charge on sustainable investments and greener • Financial Technology
assets to make an impact, we are here to build the right team • Insurance & Actuarial
for you, and have been doing so for nearly 20 years.
• Compliance
Working with the world’s largest financial institutions to
• Investment Banking
revolutionary fintech start-ups with all their hiring needs, we
have developed relationships with the brightest and boldest • Investment Management
minds in banking and finance, and deliver this talent to
• Internal Controls
leading, innovative businesses around the world.
• Sales & Trading
As part of Phaidon International, we are a trusted talent
partner working with leading firms and organizations to • Wealth Management
solve their hiring challenges.
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UPLOAD YOUR RESUME SUBMIT A VACANCY NEW OPPORTUNITIES

Contact Selby Jennings

Ben Hodzic
Managing Director
New York
Contact Ben

Jesse Skaff
Global Client Director
New York
Contact Jesse

info@selbyjennings.com Selby Jennings selbyjennings.com