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French Investment Banking Compensation Report 2021

The past 15+ months have been far from what we call normal. Q1 2020 witnessed many Western governments impose full lockdowns, bankers were trying to adapt to new environments, alongside M&A grinding to a halt overnight. The result was a year of two halves with activity jolting back to life in mid-Q2 2020. Global M&A activity rebounded to a total $3.6 trillion in 20201 and $1.3 trillion in Q1 20212 (the biggest opening quarter on record). And after an endless period of deadlines, large deals, and 18-hour working days throughout the latter half of 2020, many French bankers wondered how 2020 would fare on bonuses. There were several changes to overall compensation that were not directly tied to bonus totals in the French IB space. Firstly, we saw an increase in overall base salaries in some banks across the smid/mid-market space. Those investment banks which had long been challengers to the established banks through their ability to provide increased care and a higher standard of service to smaller clients were required to raise their salaries by up to 20% in some cases. These increases proved to be astute; it's resulted in a drastic reduction to the number of bankers open to similar roles at competitors. Aside from cash rewards, there have been wellness bonuses, promises have been made to streamline pitchbooks, create safer spaces for dialogue between team leaders and juniors, plus other intangible changes such as a guaranteed one day per weekend. One thing that has become clear this bonus season, is that junior bankers are having to work harder for their bonus figure and this work is being compensated with perks and shifts towards wellbeing. Focusing specifically on the French market, many bankers are returning to the office and the opportunities to do deals are plentiful with workload at a high across the industry. We have seen that some mid-cap and/or country teams within traditionally ‘large-cap' focused investment banks have been short-changed by bank leaders, despite having good years with strong deal-flow. The feeling of being ‘second-class' compared to their large-cap counterparts is not universal but has been raised by more than one junior banker spoken to. On the senior side, all eyes are turned towards the 2021/2022 pay packets. Those at the Director level and above are expecting a reduction to their bonus figures in order to retain their juniors and keep them happy. As a result, we're expecting a great deal of leadership moves early in 2022 if M&A activity continues to be as buoyant as it has been throughout Q4 2020 and Q1 2021.
1. Financial Times, “M&A rebounds sharply to hit $3.6tn in 2020”
2., “Deal Watch: Global M&A Hits $1.3 Trillion in Q1, Making the Biggest Opening Quarter Ever”

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