Recruitment firm PSD Group have produced their annual salary survey for risk management professionals.
It confirms the pay hierarchy for risk people. At the top, are the quantitative risk specialists. At the bottom, are the operational risk professionals. In between: market risk and credit risk people.
Strangely, given the salary increases in investment banks, PSD’s survey suggests risk professionals can earn higher salaries working for investment managers, hedge funds or private banks than they can working for investment banks.
Anyone hoping to reinvent themselves as a risk professional in an effort to find employment will be disappointed: PSD says there won’t be much risk hiring this year and that most recruitment is about gap-filling, not job creation.
During 2011, PSD also says recruitment of lower paid operational risk professionals was especially feeble. Maybe this will change? Commentators such as CreditSights have posited the loss at JPMorgan’s CIO as an operational risk issue caused by inadequate communication between the CIO and investment bank, suggesting operational risk needs greater focus.
“Operational risk people are paid less,” says Gail Danvers, manager of the banking and finance team at PSD. “A VP in operational risk would be lucky to get a bonus of more than 40%. On average the bonus is more like 20%,” she adds.
By comparison, a VP in a quant job at the top of the bonus hierarchy might expect a bonus in the region of 40-60%, Danvers says.
Although people are still moving for salary increases of 10-20%, Danvers says risk bonuses are lower than they used to be. “The days when everyone got 50-60% are over. That was a bit silly really.”
Investment banking risk salaries:
Source: PSD Group
Hedge fund, private banking and asset management risk salaries:
Source: PSD Group