Front office investment bankers typically have a spring in their step at this time of year. Bonuses are soon to be paid, and deposits have been put down on Ferraris and second homes. Unfortunately, it's not quite the same story in the back office.
Investment banking is a world of two halves. On one side, star traders, salespeople and corporate financiers can earn multi-million pound pay packages. On the other side product controllers, technologists and project managers are lucky to earn a fraction of that.
The disparity is down to end-of-year bonuses: while basic pay is relatively similar, successful revenue generators in the front office can receive 100% or more of their salary as a bonus; in support positions, bonuses equivalent to 60% or less of salaries are the norm.
"A reasonably senior vice president in an accounting role should be looking at a bonus of 50% to 60%," says Richie Holliday, a director at recruitment firm Morgan McKinley. "Heads of accounting departments should be looking at bonuses of 80% to 90%."
Richard Lett, manager of the technology recruitment team at Jonathan Wren, says IT bonuses are typically lower. "Bonuses are likely to be between 10% and 20% in IT," he says. "Obviously the front office will be paid significantly more, but there are no hard feelings - at the end of the day they're the ones that make the money."
Still, staff working behind the scenes can take solace in the fact that their contribution is increasingly appreciated. Martin Perkins, a consultant at search firm Hartwell Buck and former director of OTC derivative operations at a bank in London, says bonuses are escalating as the back office is increasingly seen as a partner rather than a cost centre. "The products offered by big investment banks have become pretty similar, and front office staff recognise that client service and the quality of operational efficiency are becoming key differentiators," he says.
Big back office bonuses are out there
Not everyone in the back and middle office is paid a bonus equivalent to a fraction of their salary. When it comes to hot areas, recruiters say multiples are on offer.
In technology roles, derivatives are the place to be. Mark Wilkes, head of the executive search practice at JM Selection, says top systems developers working derivatives trades can earn bonuses equivalent to more than 100% of their salaries. However, he says they are the exception rather than the rule.
Vanessa Coleman, managing director of operations search firm Coleman Parker, says risk specialists and accounting policy experts can also expect to be well remunerated with bonuses equivalent to 100% or more of salaries this year.
At the top of the operations tree, payouts become as hefty as any front office investment banker could hope for. According to one headhunter, operational stars such as Rich Ricci, chief operating officer at Barclays Capital, and Eileen Murray, head of global operations and technology at Morgan Stanley, are recipients of multi-million pound bonuses.