If you want a middle office job with a fat paycheck and great job security, risk management appears the place to be. Banks are desperate for experienced risk professionals and are making big offers to candidates while also doling out hefty bonuses to keep current staffers from jumping ship.
“I would absolutely say that risk management bonuses have been the highest” among the middle office professionals, said Lisa Mogilner, executive recruiter at Dynamics Associates. It’s a simple issue of supply and demand. There isn’t a wide pool of candidates with applicable experience and, with competitors making aggressive offers, banks have been forced to hand out large bonuses to keep their current crop of risk managers happy. Risk pros with CCAR (comprehensive capital analysis and review) experience are doing particularly well as there are so few people with the skill set, Mogilner said. CCAR analysts conduct stress tests mandated by the Federal Reserve.
In our recent bonus survey, U.S. risk managers reported receiving an average bonus that doubles what they were paid for 2011. (Numbers for 2012 weren’t available). The survey sample was rather small – including only 30 risk managers – but the average bonus was north of $100,000.
At Citi, the biggest cash bonus at the entire bank went to risk-management chief Brian Leach, who pocketed $9.4 million. Chief Executive Michael Corbat earned a $14 million package, but much of his bonus is tied up in deferred stock.
“Banks are taking risk seriously and it shows in hiring and bonus patterns," said Peter Laughter, CEO of New York headhunter Wall Street Services. "Firms are sending a clear message about the value of these professionals."
Interestingly, U.S. risk managers are faring much better than their EU and Asian counterparts. In credit, market and operational risk, eight years of experience can earn a U.S. manager $250k-$500k, according to the 2014 Robert Walters salary survey. In London, a similar employee would take home $150k-$234k. In Hong Kong, they may not even crack six-figures.
The U.S. is clearly the place bankers want to be in 2014. It appears this is especially true in risk management.