Forget Goldman Sachs and JPMorgan. Our analysis suggests there are at least two commodities trading houses in London where the average member of staff earns in excess of £750k a year.
The most recently filed accounts, for Mercuria Energy Limited and Vitol Broking Limited – both UK subsidiaries of the larger commodities trading companies Mercuria and Vitol – show that in the year ending 31st December 2011 Mercuria Energy Limited paid its average employee £844k ($1.3m), while Vitol paid £738k ($1.1m).
Neither company was immediately available to comment. However, the figures suggest the potential to make good money in the commodities trading sector, where bonuses are unregulated by the Financial Services Authority (FSA) and typically paid in cash (as opposed to deferred stock).
The Financial Times reports today that the world’s top commodities trading houses have made $250bn in profits over the past decade. Meanwhile, banks’ trading operations have been struggling. Morgan Stanley is said to be selling a majority stake in its commodities business to the Qatar Investment Authority in response to US regulations like the Volcker Rule, which will prevent it from trading commodities on its own books. In London, Deutsche Bank’s commodities team has been leaking staff: Yoven Devarajen Moorooven, a managing director in the UK oil and energy business and Tom Harvey, an energy trader, both left less than six months after joining.
Not all traders at commodities houses are paid enormous cash bonuses, however. Justin Pearson, CEO at commodities search firm Human Capital, said some traders will certainly earn £750k+, but that most people in commodities houses will earn, “nowhere near that amount.
“Commodities trading houses do tend to pay more cash than banks,” Pearson added.
While Mercuria and Vitol were by far the best payers in our analysis, other commodities trading houses pay less according to their most recently available accounts. Trafigura Limited paid an average of $249k (for the year ended December 2011).Marubeni Energy Europe paid $253k for the same period and Bunge UK paid a mere $106k.