Record activity in emerging markets last year has swelled the wage packets of bankers by 30%, according to executive search firm Options Group.
Bankers specialising in derivatives, corporate financiers and local markets traders have fared best with the latter able to command as much as $1.5 million annually for their services. The head of an equity sales desk can typically earn up to $1 million and the most senior equity researchers hope to collect about $600,000.
Despite rocketing salaries it's still difficult to lure employees into new jobs, according to Rossanna Scanlon, a recruiter with Options Group.
"This year people are not really wanting to move because they were paid well so a lot of them are happy," Scanlon told Emerging Markets. Even some who are tempted to look around are convinced to stay by counteroffers from their existing employers, she said.
Emerging markets received a record $350 billion in private investment last year with trading volumes at an eight-year high of $1.378 trillion. Interest in emerging market equities, as the flow of debt dries up, has spurred demand for bankers with expertise in trading local shares.
"Two years ago local markets traders were seated at the end of the row but as local markets have become more intense these guys have come to the head of the queue," Scanlon said. "External debt traders are becoming dinosaurs little by little."
The rejuvenation of Latin America, which is paying off debt with a flood of foreign investment, has made bankers with experience of the region particularly valuable, says Annie Levy, co-founder of recruiter Emerging Globe Group.
"Corporate Finance people in Latin America are worth their weight in gold right now. I've been working in Latin America since '92 and it's been about that long since there's been a shortage in corporate finance," she told Emerging Markets.
It's not just the sell side which is fighting for a limited number of skilled financiers. Fund managers and pension funds are also expanding.
"A lot of firms like ourselves are recruiting quite actively at the moment," Mark Coombs, managing director of Ashmore Investment Management told an audience at the Emerging Markets Traders Association last month.
The euphoria of 2005 is unlikely to be repeated this year as more competition chases fewer available deals. While emerging market bankers are still likely to take home a hefty raise, the increases won't be on the same scale next time round.