How much am I worth? DCM originator, leading financial institution

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A panel of headhunters gives its assessment of typical London pay packages: Basic (with over four years experience) - around 100,000 (€144,000); Bonus - 300-400%.

Last year's record low interest rates have been blamed for many things, including spiraling house prices and sharply rising consumer debt as people put increasing amounts onto their credit cards.

One of the lesser-known consequences then, though, was an explosion in debt capital markets (DCM) activity, with institutions taking advantage of rates they knew couldn't stay that low to refinance existing debt and issuers having a whale of a time. The result, this year, resembles something of a hangover.

Richard Fraser of RJF Global Search says, 'Corporate appetite was generally muted in the first quarter of this year compared to the bumper issuance in the same period last year; due to a cocktail of uncertainty and volatility, the second quarter didn't prove to be much better.'

Although activity is now picking up, most recruiters do not expect the market for DCM professionals generally - or DCM originators in particular - to significantly change, with most firms recruiting only to fill specific holes, according to James Richardson, head of DCM and credit research at Napier Scott.

That said, Richardson admits that senior individuals with high level contacts are always in demand, pretty much whatever the market conditions: 'Many mid-level originators lost their positions at many firms over the last two to three years, as the firms cut back on staffing levels, (expecting) junior professionals, with one to three years experience, to take up this slack.'

He adds, however, that remaining mid-level individuals are in greater demand as a consequence of them being cheaper to hire than more senior types and now having the good client contacts.

So what exactly does a DCM originator do all day long? According to Fraser, his or her responsibilities include pitching for bond issues and preparing all marketing material and road show material for mandates issued. Coordinating lawyers and documentation activity during issue come into play, as well as overseeing the structuring of all types of issues and of course, the marketing of products.

For all this, the DCM originator is a well-paid individual by any standard. Richardson says that somebody at director or managing director level is generally looking at a basic salary of 100,000 and 130,000 respectively. A director's bonus - in a good year - can stretch to as much as 650,000 while an MD will earn a bonus somewhere in the neighborhood of 300%.

Fraser broadly concurs, suggesting that a DCM originator with 'four years' plus' experience should earn anywhere between 65,000-125,000, with a bonus - payable very much on performance - of 350%.

So what are your prospects? DCM looks set to be a good place to remain: there is increased interest in private placement deals, a trend which has been going for some time, while corporate issuance should also start to pick up. Markets in Europe- especially the new EU accession countries and Italy, France, Spain and Portugal- are all expected to be lively into 2005 and beyond.

For the DCM originator, this all suggests a reassuring upward remuneration curve.

Comments and figures supplied by Napier Scott and RJF Global Search

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