European structured credit staff will be hit with depleted bonuses after the P&L beating many books took in May's credit correlation upheaval. Talk of low bonuses is sweeping trading floors and staffers are already searching for new positions. "It's not a question of hanging around for them, it is leave now," said one headhunter.
Ahead of the bonus season, no numbers for the drop are being kicked around, but recruiters and dealers agreed payouts at the very least will be flat for correlation traders in particular. The first bonuses are announced by Canadian firms this week, followed by Lehman Brothers Dec. 14 and Goldman Sachs Dec. 15. Bonus season continues until March.
Market players said desks which suffered losses when the downgrades of U.S. autos dislocated correlation pricing can expect lower bonuses than businesses which escaped damage. "Bonuses are not going to be spectacular this year and there will certainly be disparity between firms," said one official. A number of players speculated losers may be JPMorgan and Goldman, while another official said these firms will have re-couped loses in the third quarter and should offer competitive payouts. Sarah Oppler, spokeswoman at JPMorgan, declined comment and Rebecca Nelson, spokeswoman at Goldman, did not comment by press time. Firms reported to have avoided knocks include Merrill Lynch and SG Corporate & Investment Banking. Spokespeople at both houses did not comment by press time.
A dealer at a European firm also noted a sudden increase in "CV-flying" in the past month and said he expects many to look for new posts in the New Year. "A lot of people are feeling structured credit is not going to be paid that well," he noted.
