Dissatisfaction Grows As Bankers Take Home Smaller Bonuses

View Morgan McKinley's latest bonuses in the Japanese financial sector.

Key Findings Of The Japan Bonus Satisfaction Survey

• Nearly nine out of ten bankers (89%) received a bonus for FY 2019 — a very similar level to FY2018
• While 31% of respondents say their bonus payout was approximately the same as the previous year, 26.6% received less or significantly less
• Although 59.6% of respondents received an increase in base salary this year (compared to 55% in 2019), the increment is smaller than last year
• 40.6% of the respondents say they are dissatisfied with their bonus payment

Morgan McKinley Japan conducted its annual financial services bonus survey between 30 Jan and 29 Feb, 2020. We received 256 responses from individuals in securities, asset management, insurance, consulting companies and fintech, across the front, middle and back offices.  

Fewer People Receiving More, More People Receiving Less

The proportion of people receiving a bonus was very similar to last year. Of those surveyed, nine out of ten bankers (89%) received a bonus for FY 2019. 88% of these same individuals answered they had received a bonus in FY 2018. 

When asked how much the payout was, nearly half (46.19%) said they received between 1-20% of their annual salary. The percentage of those who received a bonus worth 60-100% of their annual salary was 13.33%.

How did this compare to last year? We found that for many (31.03%), the bonus payout was approximately the same. On the other hand, 26.6% feel it was lower or significantly lower. This figure has increased by 4.6% compared to our findings last year. Meanwhile, the percentage of those who received a higher or significantly higher bonus was 30.05%, which is 11% less than FY 2018.

Despite growing concerns over the economic outlook, most bankers still received a bonus for FY2019. However, bonus levels were stagnant, and fewer people took home bigger bonuses than they did last year.

1-5% Base Salary Increases For Majority

59.61% of respondents answered they have received or are due to receive an increase in base salary for 2020. This is 5% more than what we found last year.. 

Of those receiving a raise, the majority (67.98%) have been indicated a pay rise of less than 5% of their current annual salary. 15.76% say their pay rise falls between 5-10%. 

Compared to 2019, this is definitely a downward trend. Figures have fallen in every category except “less than 5%,” which in turn has increased by 14.07%.

It appears that although more financial services professionals are receiving an increase in base salary, the increments are smaller this year.

Growing Disappointment On Bonus

We asked participants how they feel about their latest bonus, bearing in mind the team/company performance. 20.81% were satisfied; a comparable ratio to last year (19%). However, only 38.58% felt neutral, while 40.61% said they were dissatisfied. This is the reverse of last year, where 46% were neutral and 35% dissatisfied.

We asked participants to explain why they felt this way (free text). Some showed an understanding of market conditions and company performance, and others simply had lower expectations: “A bonus is a nice-to-have.” 

However, the most common sentiment was that hard work and achievements are not reflected fairly in the bonus. A handful also raised questions about the discretionary nature of their performance evaluation. 

Although lucrative bonuses may be a thing of the past, the industry has yet to build an alternative system that motivates employees successfully . 

Bankers Skeptical Of 2020 Japanese Economy

As usual, our final question was about the overall economic outlook for Japan in the next 12 months. Here we observed a marked increase in the number of bankers who feel negative (41.09%, versus 29% last year). We conducted this survey throughout the course of February. How the world has changed since then. I expect the answers we might get if we conducted this survey again today might be quite different.