Sell-side analysts covering European equities earned, on average, €192,461 last year — a stunning 31.7 percent decline from the average compensation package of €281,687 earned in 2007, according to Institutional Investor’s 2009 Europe Equity Sell-Side Compensation Report.
Average base salaries declined 17.3 percent, from €109,905 to €90,872, as many European equity sell-side firms laid off higher-paid senior researchers and relied more heavily on lower-paid junior analysts.
Bonuses, which until last year typically accounted for two thirds of an analyst’s total compensation, declined by a much larger percentage. Many firms, forced to take multibillion-euro writedowns on credit-related losses stemming from the U.S.-led subprime mortgage crisis, and coping with slumping revenues as trading declined and assets depreciated — the MSCI Europe index fell 40.9 percent last year — slashed bonuses or eliminated them altogether. Bonus pay crumbled from an average of €180,524 in 2007 to an average of €100,889 — a staggering 44.1 percent nosedive.
Bonuses now account for less than half of a European sell-side equity analyst’s total compensation, on average.
