4200 City workers set for £1m bonuses

Published on Monday 30 October 2006 12:35

THE number of high-flying City workers set to scoop a £1 million-plus bonus is expected to rocket by 40 per cent this year.

With the stockmarket performing strongly and a booming mergers and acquisitions scene, windfalls in the Square Mile are set to soar to around 8.8 billion - with around 4200 City workers bagging seven-figure bonuses.

The Centre for Economics and Business Research estimates that the amount paid out in bonuses this year will be around a fifth higher than last year's figure of 7.4bn.

Last year, only 3000 workers were handed top-level bonuses of over 1m, but a bumper three months in the City, strengthened by a good stock market recovery and continued growth in mergers and acquisitions, private equity and hedge fund activity, has boosted numbers for 2006.

Bonuses, which come on top of a workers' annual salary, can run to tens of millions of pounds for the top traders and other dealmaking high fliers. Jonathan Said, senior economist at the CEBR, said: "Continuing strong merger and acquisition activity in 2006 - which is highly bonus-oriented - is driving corporate earnings up and the stock market higher.

"Looking forward, City bonuses are likely to trend upwards - though at a slower growth rate - as an increasing number of incentivised private equity firms based in London continue to squeeze company costs and drive corporate profits."