Salary survey: Equities salaries firm, bonuses set to plummet

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Salaries of equity salesmen and traders have held up well over the past year, and in some cases substantially increased, a survey by the Monks Partnership remuneration consultancy shows.

In spite of the dreadful year experienced by the equities sector, the salaries of senior salesmen in the upper pay quartile rose from an average 88,000 (€141,000) in August last year to 94,000 in August this year according to the survey, which covers small and medium-sized institutions.

Salaries of equities traders in the upper quartile dipped slightly from 55,000 to 54,000, but those in the median bracket rose from 42,000 to 45,000.

The figures suggest that salaries are still showing the benefits of an excellent year in 2000 and have barely started to suffer from current realities.

Ben Jones, a consultant at Baines Gwinner, the headhunting firm, said this might start to happen, however, among high fliers in the larger banks as well as at smaller ones. &quotWe haven't seen the downturn impact on base salaries very much. It could do so however if there is no good economic news around the corner," he said.

&quotAt the end of the second quarter this year, banks were still cutting out fat when they were shedding staff," he said. &quotNow the quality of people being let go is much higher."

Jones added that bonuses in the equities sector in the large banks were typically likely to be down by 40%-60% this year compared to last time.

A consultant at the headhunter Armstrong International said equities bonuses at top institutions were set to fall by up to 50%.

At the smaller firms surveyed by Monks the most recent bonuses for upper quartile senior equity salesmen, paid around the start of this year, were 56% of salary, a sharp rise from 43% the previous year.

Equities traders' bonuses doubled, from 23% to 45% last time.

These figures suggest that if bonuses of equities staff do indeed fall by about 50%, they will in many cases still be not very far below what could be expected before the boom year of 2000.

Many people involved in equity derivatives have been spared the general suffering this year, as the volatile markets have created plenty of opportunities. Equities staff in many hedge funds therefore have brighter bonus prospects than those in other institutions.

Bond traders and salesmen were also enjoying higher salaries in August this year compared to August 2000, according to the Monks survey. Senior bond traders in the upper pay quartile were earning 96,000, up from 90,000, while bonuses were unchanged at 43% of salary.

The Armstrong spokesman said pay levels in fixed income were unlikely to suffer as much as in equities over the next few months, as the sector had had a much stronger year. But fixed income bonuses could still be down by up to 20% or so compared to last time, dragged lower partly by the weak performance of financial institutions overall.

The Monks survey also showed that bond syndications managers in the upper quartile were earning 88,000 in August, down marginally from 89,000 a year earlier. But their bonus had fallen on average from 58% to 48%. Associate directors in bond derivatives trading however enjoyed sharply higher salaries, up from 89,000 to 98,000 in the top bracket.