You Think Wall Street Pay Is Bad? You Should See What's Happening To China's Bankers

hong kong city skyline china

Investment bankers in NYC saw an 8 per cent increase in their bonuses this year, but they’re still not getting paid like they used to before the financial crisis.

That has a lot of bankers on the Street frustrated. But, as Bloomberg reports, it’s important to count your blessings, one of them being that pay cuts in New York City aren’t nearly as bad as they are in China.

From Bloomberg:

Compensation for managing directors at global financial firms in China, including Morgan Stanley, JPMorgan Chase & Co. (JPM) and Deutsche Bank AG (DBK), has fallen as much as 60 per cent since 2010 to the lowest level in a decade, according to five senior bankers with knowledge of employee pay who asked not to be identified because they aren’t authorised to discuss the matter.

China managing directors now earn less than their counterparts in the U.S., and their pay is on par with those in Europe and the U.K., where lower bonus pools last year meant a 15 per cent cut in compensation. A decline in fees resulting from a dearth of deals has erased the so-called China premium enjoyed by bankers focusing on the country, the people said.

Bloomberg goes on to report that salaries are the lowest they’ve been since 2003. Your average managing director in Hong Kong or Beijing, on the other hand, is still probably making between $900,000 and $1.3 million.

This is interesting beyond figuring out where individual bankers should pick their next job, because it’s ultimately about where banks are doing business. Banks put their compensation money where the deals are, and it looks like they’re saying that those deals are not in China.

From Bloomberg:

“The very big ticket items of the past — mega public- sector IPOs, vast restructurings — appear to be behind us,” Ken Courtis, founder of Tokyo-based advisory firm Next Capital Partners Co. and former Asia vice chairman at Goldman Sachs wrote in an e-mail. “In investment banking, salaries and bonuses are related to the volume business, and it’s a revenue game.”

The lesson here is simple: Follow the deals.

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