Once upon a time, all investment banks used to pay their most junior staff - their analysts - in the summer. A few years ago, most of them switched to paying analysts along with everyone else in the New Year. A couple, however, stuck with the summer payment cycle. They've just paid and recruiters in London say they haven't really paid that badly.
European M&A is down 20% this year according to Dealogic. However, recruiters say Bank of America and J.P. Morgan - which still pay analyst bonuses in the summer - have cut variable compensation by a mere 10%.
Banks don't discuss compensation. But if bonuses really have been reduced by as little as 10%, last year's bonus figures for BAML and JPM from recruitment firm Arkesden Partners, suggest this year's payouts at those banks should look like this:
European M&A fees are down by 20%, or $113m on last year. To help mitigate this, the implication is that Bank of America and JPM are saving a few thousand pounds/dollars in bonuses per head for their most junior staff. All things being equal, they should really have cut bonuses by twice as much - but it looks like juniors are being shielded from the vicissitudes of the market, again.
The real question is whether other banks will carry on protecting M&A juniors if M&A fees fall further. During its recent second quarter investor call, Goldman Sachs said its M&A pipeline was on a "downwards trajectory" for the remainder of this year. The new batch of first year analysts who've just joined Goldman's M&A business have been put onto a summer payment schedule for their first three years at the firm. However, existing second and third year Goldman analysts will be paid in January 2017 as usual. - In five months' time, they may wish that wasn't the case.