Canada bank bonuses rise despite market turmoil
By Cameron French
TORONTO (Reuters) - Canadian banks are handing out 7 percent more in bonuses to their employees this year, in sharp contrast to slumping payouts in the United States and a sign of the relative strength of Canada's financial sector.
Even so, Canada probably should hold off on exuberant celebrations. Performance-based compensation at smaller brokerages has declined this year, observers say, and the outlook for 2012 at even the big banks suggests a repeat performance is unlikely.
The country's six biggest banks set aside about C$9.5 billion ($9.3 billion) for performance-based compensation in fiscal 2011, up from C$8.9 billion in 2010, according to earnings statements.
Some of that is due to acquisitions made over the past year, but setting that aside, the bonuses handed out this year are expected to be at least even with last year.
"I think you'll find bonus numbers in the fixed income area being down, but you'll probably find in the investment banking areas, in the hotter sectors like the mining and resources, it will be higher," said Colleen Watson, president of executive search firm Watson Gardner Brown.
"All in all, just up slightly or sideways."
The healthy bonuses underscore the strength of Canada's big lenders, whose fourth-quarter earnings rose 34 percent to C$6.4 billion, despite narrowing interest margins and generally weak financial markets in the second half of the year.
WALL STREET BONUSES LOWER Continued...