Hawkeye: Better The Devil You Know

A colleague recently told me about a ground-breaking ‘frown-control’ treatment called Pro-tox, which promises to make patients look ‘calm, relaxed and in control at work’, whatever torment happens to be bubbling under the surface. It’s so named because this is Botox for professionals; designed for the recession-withered, FTSE-whipped City worker to appear relaxed and stress free, rather than to iron-out the wrinkles of vain, age-phobic Chelsea housewives and Simon Cowell.

You could, say, deliver a lengthy speech on using particle filtering to understand market microstructure variables, undressed, while being heckled by members of the Ukrainian mafia, yet betray no outward signs of discomfort. It’s hard to imagine when that wouldn’t be useful in the Square Mile, which got me thinking about the possible applications of Pro-tox. Imagine if you could answer the question “So, how big was your bonus?” with a non-revealing poker face, whether you got nothing more than a pat on the back or had to buy a new mattress to store all your new cash under.

Evidently the Pro-tox poker face might be coming in handy next year, because the Centre for Economics & Business Research says 2012/13 performance bonuses are set to be 50% lower than this year’s (which was, in itself, hardly a vintage crop). The thinktank predicts a total of £2.3bn will be dished out, a whole £9.3bn less than in 2007/8 and as low a pool as there has been since 1998. Considering that was the year in which Manchester United TV was launched, work started on the Millennium dome and Geri Halliwell’s Union Jack dress was sold at auction for over £41,000, these are clearly bleak times ahead.

Obviously this shouldn’t come as a great surprise to anyone with even half an eye barely focused on the global financial outlook, or who happens to have noticed that the public aren’t exactly putting out the bunting at bonus time and the shareholders are revolting [insert own gag here]. Or so you’d think, but research conducted by recruitment firm Hays suggests otherwise.

Of 2,400 financial professionals surveyed, 60% of those considering leaving their current employer said they would do so because their last bonus was sub-par. Revealingly, 55% believed they would get a better bonus elsewhere which, given that 69% of those surveyed were unhappy with theirs, seems a touch optimistic.

Perhaps it’s the constant chirping in the media about obscene City bonuses (whatever the reality) and the freshly minted activist stance taken by shareholders in some quarters that breeds an ‘everyone’s-getting-loads-except-me’ mentality, or maybe there are still plenty of bankers out there still struggling to believe it’s no longer 2007. Bad news, people: no one uses Myspace anymore and Michael Jackson’s dead, and you’re unlikely to get a big fat wad of cash in Q1 2013 if you join the bank next door.

Whoever you are, and whatever the size of your bonus, though, it won’t cause as much fuss as Stephen Hester’s has over the past months. Halfway through the year we may be, but there’s been no rest for the wicked witch of RBS, who has admitted that he almost quit over the drawn-out furore that led him to reject a share bonus of almost £1m. Though at least there are those now coming out in support of under-fire Hester’s pay packet, including Schroders’ head of UK equities Richard Buxton and Robert Talbut, chief investment officer of Royal London Asset Management, who told a parliamentary enquiry last month that RBS’s “ability to retain a commercial management team is going to be severely inhibited if they do not believe they are going to receive a significant market rate”. Hardly revolutionary, but then what is glaringly obvious hasn’t always been particularly glaring (or obvious) for the current government in recent years.

Perhaps all this will lead Hester to test whether the grass really is greener elsewhere. If not, he might be practising his bonus poker face along with the rest of the City next year, and not to disguise any signs of his delirious happiness.

Email Hawkeye at jon@squaremile.com