City trader sues over £230,000 bonus

A former City equities trader is suing the investment bank where he worked because he says his bonus was "only" £230,000.

Stephen Fairholme, 33, who worked for Merrill Lynch as a senior dealer in South African equities, is suing for around £1million.

Mr Fairholme, from Notting Hill, claims that when Merrill took him on in 1998 he was promised a bonus of more than £270,000, to be paid in January 1999. He says some £42,000 was not paid to him directly but was put into a long-term bonus scheme and he has never been able to recover it.

The value of his case, which has been lodged in papers at the High Court, is augmented because of the sum he says he should have been paid the following year - just under £1million - when he says he earned Merrill almost £10million profit. A spokesman for Merrill Lynch declined to discuss the case, while Mr Fairholme was unavailable to comment today.

Most City experts say the days of the mega-bonus are over. In the late 1990s, City bonuses would dwarf bankers' basic salaries, routinely running into hundreds of thousands of pounds, while more than £1million was not uncommon. Some high-fliers got "guaranteed bonuses", where they were told in advance that they would be paid a salary and a lump on the side, however well they did during the year

For almost everyone however, the 2002 bonus round has been different. Over the past few weeks, bankers from the top City firms have been learning what bonus they will be paid for 2001 and virtually all are disappointed. Last year was miserable for investment banking. Profits went out the window and thousands of bankers were made redundant.

Those who were left have had to take their pickings from a much-reduced pot. Some workers have received nothing at all. Others have had their bonuses halved or worse. Average salaries for professionals are still routinely more than £100,000, though, and bonuses frequently take the total package to £250,000 or above.