Working as a VP in an investment bank can be a thankless place to be. It’s where your career tends to come to a standstill and the director or MD level job becomes ever more aspirational. Couple this rank with working in a trading job, and you also have to fear a 24-year-old coming for your job.
And yet, VPs have enjoyed decent increases in their pay this year. Even more surprisingly, some of the biggest gains have been in trading jobs. Figures from recruitment firm Options Group suggest that working in long end treasuries trading as a VP is the place to be. At the upper end, total compensation for VPs came in at $900k, its figures suggest, and pay increased by 15% year on year.
The figures from Options Group below represent total compensation figures for the top 25% of employees and do not include any data from people who had guarantees or who were within the top 1% of performers. But they also suggest a correlation between the level of human interaction in the trading process and an increase in pay. Spot FX traders, who work in a sector that is increasingly automated, were among the lowest paid with compensation between $250-500k and received the lowest uptick in pay with a 3% raise.
This is not surprising. Despite an increase in revenues for fixed income currencies and commodities teams at investment banks this year, FX was still down by 6% year on year, according to research from Coalition. Rates and credit were the biggest gainers with 26% and 20% gains respectively.
What’s also strange is that equities traders managed to secure a pay rise at all. Cash equities revenues were down by 17% last year and equity derivatives slid by 26%. Nonetheless, a 5% pay rise was on the cards last year. Perhaps sales staff took the hit. Cash equities sales VPs suffered a 10% year-over-year decline in their compensation, earning between $350k and $550k last year, according to Options Group.
M&A banking VPs suffered a similar fate, with a 10% decline in pay from 2015 to 2016. Their total compensation ranges from $375k to $650k, per Options Group.
VP pay raises
Vice president-level traders on Wall Street specializing in the following six asset classes all got pay raises from 2015 to 2016. Here are the ranges of how much they got paid last year, including their base salary and recently announced bonus.
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