Thanks to the probable combination of high stock payouts, higher salaries, and longer deferrals, this year’s cash bonuses may well be disappointing. Total packages may be more impressive though, particularly if you have the good fortune to work in one of the areas below – and the patience to stick around until everything vests.
1) Commodities
Successful commodities traders are in the fortunate position of having had a good year and being sought after by banks expanding in the area. As we mentioned last week, Nomura, Credit Suisse, BofA, BarCap and Standard Chartered are all hiring. BNP Paribas is also on a commodities push.
2) High frequency trading
Speculation (of a totally unsubstantiated nature) suggests Goldman makes as much as $4bn a year from high frequency trading. Other banks are said to be interested in moving into the space, which has the added advantage of requiring minimal capital. As we mentioned yesterday, the indications are that some high frequency traders – particularly in hedge funds – are paid very well indeed.
3) Rates
Wide spreads, particularly in the first half of the year, have driven record performances in rates sales and trading, with structured rates professionals said to have done particularly well. “Goldman’s rates business hit its target back in June,” claims one headhunter. Expansion at the likes of Barclays Capital is likely to ensure that existing rates teams are well rewarded for reasons of retention.
4) FX
As with rates, so with FX. “A lot of FX people are expecting to be paid up this year, and 2008 was a good year, so they’re starting from a high level,” says one FX search consultant. Scandi FX salespeople can apparently expect to be paid particularly well, due to scarcity value.
5) Credit
Think the likes of high yield, where capital gains have been substantial and global issuance rose around 96% in the first half of this year.
“Any bank with a good FX, flow credit or commodities business has blown last year out of the water,” says the head of one fixed income search firm. “The expectation is that pay this year will be north of 2007.”
