With demand for junior corporate financiers hotter than ever, recruiters say even first-year analysts can now command guaranteed bonuses.
"Two years ago, people would have laughed in their faces if such junior staff had asked for guarantees," says Jim Nairn of recruitment firm Cornell Partnership. "Nowadays they're becoming increasingly common."
First-year analysts with nine month's experience can now command total packages of 65,000, says Nairn. Second-year analysts can now command 85,000, and analysts with three years' experience are on 100,000 to 110,000.
He says banks have a struggle on their hands when it comes to massaging analysts' pay expectations down in the run up to summer bonus payouts.
Show me the money
Speaking of bonuses, only 16.5% of workers think they will be getting a lower bonus this year than last. This according to the current eFinancialCareers.com poll on how employees' pay prospects are shaping up.
Everyone else thinks they'll be better off come payout time, with a healthy one-third of respondents believing a 50% bonus jump is coming their way.
Make way for juniors
With banks facing unbundling issues of cost and value within equity research, many firms are looking to replace senior departures with associate-level juniors.
JPMorgan, Lehman Brothers and Morgan Stanley are among the investment banks looking to bolster their equity research teams, says one recruiter specialising in sourcing equity research talent. "Banks are looking for analysts to cover small to mid-caps but in specialist, sector-focused areas like pharmaceuticals, utilities and retail," the recruiter says.
By way of example, Investec Investment Bank and Securites said today it was starting coverage on three new sectors - financials, biotech, and building/construction - and hiring into its existing TMT equity research team.
Goldman in Asia equities push
Goldman Sachs is on the analyst hiring trail in Asia. In an interview with Finance Asia, Goldman's co-heads of equity research, Paul Bernard and Joseph Lee, said they planned to add 13 equity analysts in India, and another five to the existing 15-man team at its Gao Hua Securities joint venture in China.
Things are looking up for analysts in the region. Bernard said multiple-year bonus guarantees could soon be back on the cards.
Bear bullish on broking
The Telegraph reports that Bear Stearns is preparing to build a presence in the UK's small and mid-cap broking market. A spell of recruitment could be on the cards, but Bear Stearns apparently declined to comment.
SocGen to hire 750
French bank Société Générale revealed just how much hiring it's been doing when it disclosed its first quarter results Thursday. Since the first quarter of 2005, the bank said it had added 600 staff to its equity and advisory businesses.
It plans to add another 750 in 'high growth segments' in 2006. Operating costs rose 23% in the past year, and with the bank hiring in competitive areas such as equity derivatives, expect the pace to accelerate further in future.
Banks poor places to work?
Many may not be surprised by the fact that only three investment banks made it into the latest Financial Times roster of the top 50 UK workplaces, and even then, clustered sadly towards the end of the list.
Lead by Goldman Sachs at 23rd place, Lehman Brothers and Morgan Stanley came in at 42nd and 44th respectively. Although the banks offer first-year analysts a salary of between 30,000 and 49,113, plus bonus (some guaranteed, see above), the banks still failed to beat other lower paying companies for job satisfaction.
To boutique or not
With boutique advisory firms becoming an increasingly attractive option for many senior bankers, will others be quick to follow? This week HSBC's John Studzinski yielded to the overtures of New York-based buy-out group Blackstone, attracted by the prospect of working in a smaller operation.
Studzinski is said to be looking forward to the new environment of a "smaller, private partnership" that also offers the challenges of a global business.
Senior corporate financiers at HSBC are less likely to bail out, suggests one recruiter. This is because many are on guaranteed bonus packages and because top-tier banks may not want them back. "People who traded out of tier-one investment banks to go to HSBC will find it extremely hard to trade up again," says the headhunter. "They're most likely to find new jobs in boutiques." A la Studs.