Asian bankers have had a record 2007. Does this mean they’re being handsomely rewarded for their efforts? No.

“There’s a certain amount of disappointment in Asia,” says Darren Kemp, managing director for Asia at Akamai Financial. “Banks have been clever and targeted bonuses on top performers, but this is likely to cause some trouble in the employment market in 2008.”

“We’re seeing a massive disparity between individuals within banks,” says Stephen Small, a director at Pelham International. “People that are considered superstars and future leaders are being paid market, or above market rates – up 25% on last year’s figures – but others are being paid less. The ranges are pretty phenomenal.”

Headhunters in the region say early indications are that Goldman kept its junior bankers in Asia happy, but risked upsetting senior staff, whose bonuses are rumoured to have come in lower than expectations after record Asia-generated fees were dispersed globally. Lehman is said to have paid its Hong Kong-based investment banking associates 10-30% down, while its global markets staff in the region were reportedly paid flat – despite higher production – as money was diverted to subsidise colleagues in the US and Europe.

Pushing the boat out at Morgan Stanley

The one outlier, in Asia at least, appears to be Morgan Stanley, which is said to have paid plenty of its Asian bankers anything from 10-30% more than they got in 2006. “The feeling is that this could be the first time that IBD Asia got paid better than NY and London,” says one headhunter.

Given Morgan Stanley’s poor fourth quarter results, can it afford to be quite so generous? Compensation and benefits as a proportion of revenues rose to 59% for 2007, up from 47% in 2006. At Goldman, the comp ratio for the year was 43.9%.

Subsidising the US

If any Asian bankers are upset about their payments, it’s most likely to be those with short memories, says Marco Janes, chief operating officer at Akamai: “The young crowd might not get it, but the old crowd will remember plenty of times when they were bailed out by Europe and the US.”