Did VPs receive some of the biggest pay increases in the last bonus round?
A new salary survey suggests they may well have done. Recruitment firm Fennemore Banks’ study of 238 London bankers suggests vice presidents (VPs) in investment banking saw bonuses up an average of 18%.
This was higher than the boost received by most associates, and higher than analysts’ average rise of 16%.
Adam Cairns, a director at Fennemore Banks, says VPs are flavour of the month because banks are suddenly keen to bring in people who can originate deals. “There’s been little requirement for junior to mid-level VPs in the last five years – team structures have been more senior managing directors as originators and the analysts and associates who are executing deals,” he says. “But banks are now trying to attract and retain potential future originators.”
Second-year VPs received average total compensation of 303k last year, according to Fennemore. Third-year VPs enjoyed total comp of 352k.
But while VPs are undeniably handsomely paid, not everyone is in accord with Cairns’ analysis of the market.
Neil McKay, consultant at search firm Sheffield Haworth in London, says he knows of at least one second-year VP who took home 550k last year. But he says banks’ appetite for mid-ranking bankers is no heartier than before: “There’s a lot of demand for everyone, VPs included.”
This is confirmed by a senior headhunter at a rival firm. “If banks want origination talent, they hire managing directors,” she says. “They’re really interested in people who can make a difference quickly – it could be six years before a VP can command a relationship and by that time we’ll be at a completely different stage in the cycle.”
A study earlier this month of 350 European M&A staff by IntraLinks, a secure workspace provider, for Financial News, found 69% plan to hire this year, with the Nordic region and Germany areas of particular focus.
Pay for VPs 2006/2007
Vice president one
Basic: 75k. Bonus 223%
Average total compensation: 242k
Vice president two
Basic: 83k. Bonus 266%
Average total compensation: 303k
Vice president three
Basic: 88k. Bonus: 301%
Average total compensation: 352k
· Source: Fennemore Banks