It looks like it is going to be a bumper bonus season in the City of London this year, with more than half the capital's investment bankers and financial services professionals expecting their payouts to be more than 50 per cent higher than last year.
More than nine out of 10 City professionals polled by recruitment consultants Morgan McKinley said that they expect their bonus to be higher than in 2005/2006.
Almost three out of 10 (28 per cent) are predicting a rise of up to 50 per cent, while a quarter (24 per cent) are expecting their payment to be more than double what they enjoyed last year.
Although almost half (47 per cent) claimed to have been disappointed with the bonus they received last year, this does not seem to have had any impact on expectation levels for this year.
Indeed only a quarter (24 per cent) said that they would stay with their current employer if their bonus payment did not meet their expectations.
"2006 has been another good year for the City and most employees will now expect to see the rise in corporate profits reflected in their bonus payments" said Robert Thesiger, Chief Executive of Morgan McKinley
"More than ever this season, banks will be using bonuses as a key retention and attraction tool, heavily compensating internal talent, while sending a clear message to potential employees of the level of reward available within their organisation.
New vacancies increased by seven per cent on July and 19 per cent over the last quarter, he added, but candidate grew by just four per cent over the same period, sending expectations rocketing and pushing the average City salary above £50,000 ($90,000) for the sixth consecutive month
With the gap between demand and supply continuing and no sign of the 'war for talent' abating, bonus payments are a key weapon in retaining top talent. But these soaring bonus expectations have brought with them growing antagonism as some high-flyers accuse their employers of trying to avoid making huge payouts.
One bond trader has already filed a claim for £7.5 million ($14 million) from his former employer, Nomura, while other employees of the bank are also said to be considering similar action.
Luis Marti-Sanchez alleged that Nomura breached his employment contract when it paid him £1.3m in deferred shares as a bonus last year. He claimed that he is owed between £4.2m and £5.35m in cash for a single structured trade.
According to Elaine Aarons of leading City law firm Withers, there are "far more seven-figure claims" waiting to be filed at the courts from her firm alone.
Other reports have suggested that even claims running into the tens of million might soon emerge from disgruntled energy and metal traders.
"Once again banks will have to carefully manage the bonus expectations of their staff to ensure they remain realistic about potential payouts," Robert Thesiger added.
"Nevertheless, the end of the season always encourages movement in the market and so we would expect to see increased candidate fluidity during the first quarter of 2007."