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City employees expect 20% bonus hike

Top ranking employees at City firms are confident they will see a 20 per cent increase in bonus payments this year despite critical public opinion and the impending EU cap on payouts, according to a survey.

The majority of the 1,500 senior City workers polled expect their bonuses to rise by 21 per cent to an average of £124,680, up from £102,930 last year, according to the survey conducted by recruitment firm Astbury Marsden, the Financial Times reports.

In addition, 40 per cent are expecting a bigger bonus this year, compared to 34 per cent in 2013.

Rising bonuses fly in the face of the EU bonus cap, that will limit payouts to 100 per cent of base salaries, or 200 per cent with shareholder approval, from 1 January 2015.

If bonuses do rise 21 per cent, this would bring payouts to 60 per cent of average salary, the survey says.

However, the private equity industry is anticipating an average bonus of £145,000 or 115 per cent of the sector’s average salary.

The Treasury, FCA and Bank of England argued the cap was “the wrong policy” but the UK Government dropped its plans for a legal challenge in November.

Astbury Marsden director Adam Jackson says: “Despite shareholder and public pressure to limit bonuses, and with the EU bonus cap now set to be introduced at the start of 2015, City staff clearly feel that their employers are in the position to reward them well.”

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