City staff bonuses are slashed by £400m

The big City finance houses slashed staff bonuses by £400m last year.

Research by the Office for National Statistics shows that bonuses had been
hit by difficult trading conditions and the fallout from the 11 September
terrorist attacks.

The combination of cutbacks and job losses at investment banks caused the
national average earnings growth rate to slip to 1.9 per cent in December – its
weakest level since 1967.

Director of global compensation and benefits of Fidelity Investments, Mark Childs,
said investment banks had been worst hit, but this should not damage staff

"The picture is very mixed, because if you work in insurance or asset
management bonuses are less volatile.

"If you work at an investment bank it’s part of the psychological
contract – you expect to earn incredible bonuses in the good years, and that
will fall away in the bad years." he said.

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