Derivatives bankers across the board are likely to get bonuses around 30% higher than last year. The news is expected to have derivatives professionals dusting off their Ferrari brochures after more than three years of lean times. In addition, derivatives houses will likely start to increase their headcount after bonuses have been paid out.
The remuneration that similar level bankers receive will vary enormously, according to derivatives professionals. For example, a structured products v.p. could be paid anything between USD100-800,000 depending on the individuals performance and skills.
In structured equity products, for example, there is a shortage of marketers to Germany and a surplus of French marketers. One banker said French marketers could double their remuneration by learning German. Paul DeLucia, managing partner at the Options Group in London, said, "There are a few countries where there is always a search for anyone good. And Germany is one of those."
This year is also likely to see more bankers switch firms after bonuses. "For the last three years we have not seen the sort of movement we were accustomed to in the '90s," said Shaun Springer, ceo at Napier Scott in London. In the credit derivatives arena there is also a new breed of employer vying for top quality staff: hedge funds. Three years ago credit derivatives professionals did not have the option of moving to a hedge fund, but in the last year or two structured credit funds and capital structured arbitrage funds have started to emerge.
The dollar's recent precipitous fall, however, is bad news for European-based investment bankers working for U.S. houses because they are paid in dollars. The dollar was trading at USD1.26 against the euro on Friday, down from USD1.05 a year ago. This will have wiped out most of any increase in their bonuses.
