City recruiters are wary of the Financial Services Authority’s proposed new rules on bankers’ pay and bonuses that would link their pay more closely with the banks’ longterm profitability, and which are planned for implementation in January 2010.

Nevertheless, adjustments are already being made to basic salaries for some roles to pave the way, said Richard Hoar, divisional director for banking and financial services at Citybased financial recruiter.

“Salaries are going up,” Hoar told Recruiter. “They’re starting to pay analysts a lot more in the second year — the average second year salary for an analyst was £42K, and that will go to £50K.”

Managing directors are also benefiting from pay hikes, Hoar said, increasing “a lot” from a base of £100-120K. “We’re seeing a few moves like that,” he added. “People are putting some measures into play.”

At City recruiter Joslin Rowe, associate director Belinda Walmsley told Recruiter: “The real issue is merited rewards for sustained performance
rather than for ‘flash in the pan’/speculative schemes and many of the banks are already overhauling their bonus allocations with deferrals to
reflect this long-term approach.”

She added: “As [FSA chairman] Lord Turner himself has said, any solutions would need to be global… The damage that would be caused
by the UK implementing special taxes in isolation could potentially be far graver than anything we have seen so far.”