December 6, 2002	Friday	Shawwal 1,1423

LONDON, Dec 5: Private bankers and fund managers, accustomed to fat bonuses in the bull market, took home lighter paychecks this year with base salaries frozen and bonuses down to half of 2000’s record levels, an industry survey showed.

The survey by global headhunters TMP Worldwide said bonuses in 2002 in the fee-based industry will be 15 to 25 per cent below last year’s levels following a 2001 drop of 25 to 30 per cent.

For example, a British chief executive of a fund company with $25 billion of assets under management would see this year’s bonus drop to $680,000 at the lower end from $850,000.

“Firms generally have frozen base salary increases again this year especially for senior professionals,” said the survey.

“Hell will freeze over before they move again!” it quoted a senior human resources executive at a major mutual fund company as saying, referring to staff base salaries being reviewed.

The survey said the pain was being felt in varying degrees with continental Europe likely to suffer smaller cuts than those in Britain and the United States due to the continent’s fixed income focus. (see tables below).

“The consensus, in most but not all cases, is that continental Europe and Asia outperformed investment management businesses in the United States and Britain,” TMP said.

Firms strong in retail distribution or a high net worth focus generally fared better than institutionally oriented ones.

Compensation in fund management and private banking has shrunk across the board as banks retrench in the downturn and axe thousands of jobs. Amidst wholesale layoffs, many investment professionals simply are grateful to still have jobs, TMP said.—Reuters