Compensation packages for fixed-income derivatives marketers, structurers and originators are skyrocketing in the Asia-Pacific region as banks struggle to staff nascent bond and credit derivatives groups. Richard Stein, senior client partner and head of capital markets at executive search firm Korn/Ferry International in New York, likened escalating salaries in the region for fixed-income professionals to a stock market bubble. "Particularly on the marketing and origination side, we're seeing some irrational exuberance" as banks compete for limited talent, he said.
Stein said salaries have escalated in recent years, with banks offering seven figure starting packages for structurers, marketers and originators with four or five years of experience. "Banks are then pulling in three year associates and inflating their salaries: where they would be making $350,000 they start making $800,000," he stated.
While J.P. Morgan and Deutsche Bank have a leg up and more established presence in the Asia-Pacific region, other banks have resolved an integrated global derivatives presence is essential and are expanding their focus beyond the domestic markets in New York and London, Stein explained. "Because the Asian market is a nascent market, it's a question of looking to build teams out with the right skill set and [geographical knowledge]," he noted, explaining why banks are paying up for existing relationships. Stein noted Goldman Sachs, Dresdner Kleiner Wasserstein, Lehman Brothers and Citigroup are among the firms focusing on the region.