Finance

RBC Capital Markets to hike associate bonuses as junior talent war continues

RBC Capital Markets is bolstering bonuses for its associates to around 100% of salary this year —  a bellwether of what to expect from Wall Street rivals in 2022 as banks battle to retain junior talent.

The Canadian bank, which pays bonuses in December, is set to hike payments for associates this year, according to people familiar with the matter.

First year associates at the bank earn salaries of between £105,000 and £110,000, they said, while those in their second year are paid £120,000 following increases earlier this year.

Bonuses are likely to match salaries, the people added, but these will be formally communicated in December.

A spokesman for RBC Capital Markets declined to comment.

The bonuses set the tone for the upcoming season at Wall Street and European banks, which pay out from February through to May, as lenders have fought for junior talent amid spiralling hours and an increase in burnout.

READ Why $100,000 pay still isn’t enough for junior bankers: ‘90% of my team is gone’

Associates are the next level up in the bank hierarchy from analysts, who received their bonuses in August at many Wall Street banks. Goldman Sachs increased bonuses for analysts by 130% to £64,500, according to figures from recruiters Dartmouth Partners, as all major banks hiked payouts for their juniors this year. 

Investment banks have battled to retain juniors through the pandemic as working weeks increased to 100-hours amid a record deal boom and Covid-19 lockdowns which have kept many cooped up at home in their apartments.

A leaked presentation by a group of 13 San Francisco-based Goldman Sachs analysts in March, which outlined declining mental and physical health, sparked a rush from investment banks to increase salaries and overhaul working practices in a bid to retain young stars. 

READ ‘Should I feel sorry for them? No’ — Bankers scoff at Goldman Sachs juniors’ stinging survey

Banks including Bank of America, Citigroup, Deutsche Bank, Morgan Stanley and UBS all increased entry-level salaries from around $80,000 to $100,000 over the summer, while others including Credit Suisse rolled out one-off bonuses. Goldman Sachs was one of the last major banks to hike salaries, but ended up topping peers by shooting pay up to $110,000.

In a bid to get a handle on workload, JPMorgan also embarked on a junior hiring spree that will see 190 additional analysts and associates recruited this year, while Goldman Sachs has taken on around 200 juniors for its investment bank in Europe, the Middle East and Africa.

To contact the author of this story with feedback or news, email Paul Clarke

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