Total bonus payments in financial year 2014/15 were £42.4 billion, an increase of 2.7% on the previous year. Across non-financial industry organisations a total of £28.8 billion was paid out in bonuses, an increase of 9.7% on last year.
The sector with the biggest increase in bonuses in 2014/15 was the professional, scientific and technical services industry, showing a rise of £0.9 billion on the previous year. This was followed by the information and communication industry with an increase of £0.5 billion.
Bonuses fell in the finance industry to 20% of total pay in 2014/15. £13.6 billion was paid in bonuses across the finance and insurance sector, a decrease of 9.6% since the previous period.
Dave Way, managing director of financial recruitment specialist Marks Sattin, described the finance and insurance industry data as “murky at best”.
“On the one hand the fall in bonuses could be a sign that increased regulation from both European and domestic bodies is starting to bite, but, as the ONS highlights, it could just be a symptom of many bonus payments being deferred to April in the previous financial year and thus distorting the figures,” he said.
“The debate about bankers’ bonuses rages on, especially now it looks as though a broad interpretation of the EU bonus rules will be applied. We believe the better policy, which will recapture the trust of the British public, is one that discourages short-termism by using clawbacks and deferrals rather than capping bonuses.
“The cap is already being successfully circumvented by some firms handing out shares to senior executives rather than cash.”
Mike Haffenden, director of the Corporate Research Forum, said that it is not clear if bonuses make a difference to performance. “However in the real world, the vast majority of employees at a senior level receive or benefit from a bonus scheme and it is, therefore, a brave organisation or individual who moves away from the norm.
"There is strong pressure from reward consultancies to keep bonuses in place, and complexity aids their cause. Most HR directors are in favour too – it keep their bosses happy. RemCos, however, are mixed in their competence and not all are equipped to contribute to the debate.
"There are certain obvious rules of the game including only paying for real and improved performance. Herein lies the problem. We need to identify what good performance is and what individual contribution and behaviour contributes to it. This can be complex work.
"However, there is nothing to indicate that things are going to change anytime soon," he added.