Banks and hedge funds are stepping up their bonus buyout offers as they try to prise key staff from their competitors.

Astbury Marsden found buyouts of shares are taking place in 80% of new hires compared with just 20% of new hires a year ago.
 
And 20% of bonuses are now bought by giving the new employee cash, with the remaining 80% bought by giving the new employee shares and share options, says Astbury Marsden.

According to Astbury Marsden, 5,157 new City jobs were created in September 2010, a 2.5% rise on the 5,031 created in August 2010.

A bonus buyout is where an employer will offer to buy out the shares or options that a prospective employee has accumulated under their current employer’s bonus scheme but which they do not yet own.

Jonathan Nicholson, managing director at Astbury Marsden, said: "Banks are now prepared to buy out 100% of a potential employee’s shares or options they have locked up with their current employer."
  
Astbury Marsden says that bonus buyouts have accelerated in the past month as banks try to winkle free their competitors best earners before the recruitment market slows down at Christmas.

Nicholson added: "Banks and fund managers are confident about next year and they still want to add to their teams. Within reason, they are willing to pay for the talent."
 
"A successful trader or banker will now no longer move unless their entire share bonus scheme is bought out. A year ago they would have been more flexible – now they don’t want to forgo a penny."