If you want a high-paying job in compliance, keep your eye on the headlines. Scandals not only generate openings – they also create desperate employers ready to open their wallets.
The most recent look at the market for compliance personnel has improved on an already optimistic diagnosis. The bank most desperate for compliance staffers, scandal-plagued J.P. Morgan, is now paying consultants north of $100 per hour, according to the Wall Street Journal. That’s up from $60 per hour at some smaller banks that don’t grace the pages of global newspapers quite so often.
J.P. Morgan has little choice. The bank, which has paid more than $20 billion in fines over the last year, needs warm bodies. Chief Executive Jamie Dimon said recently that, by year-end, the bank will have hired 13,000 employees to support regulatory compliance efforts.
The two other firms with lofty hiring goals – Citi and HSBC – have had their own troubles. Citi is reeling from the Banamex loss and its failing of the Fed’s stress test, while HSBC continues to deal with tax evasion claims.
While compensation at these firms likely leads the industry, overall pay for compliance personnel was up 5% last year, which beat earlier estimates as well as salary increases for other roles in banking, according to the Journal.
Looking ahead, competition for trained compliance staff should only increase, as should salaries. The Securities and Exchange Commission on Tuesday signaled that major oversight changes would be coming to the private equity industry. Planning for the worst, private equity firms are staffing up in compliance right alongside big banks.
“Legal and compliance is our fastest growing part of the firm by far,” Blackstone President Tony James told Bloomberg. In its review, the SEC found half of all private equity firms are showing “severe compliance shortfalls.”
What will be interesting to see is how long this run on compliance staff will last. Surely, hedge funds and private equity firms are just getting started. Banks too have more red tape to deal with, but much of the bulk hiring seems reactive. A bank lands in hot water, and it soon announces plans to hire thousands in compliance. What happens when J.P. Morgan has a clean 12 months?
Likely that’s why they’re hiring contractors. Get your money while you can.
While there may not be much you can do to prevent being laid off, it’s always important to read the tealeaves so you don’t get blindsided and find yourself with no immediate prospects.
The investment banker of the future will look nothing like that of the past. Here’s an in-depth look at where the industry is headed and who banks will be looking for down the road.
Proxy-advisory firm Glass Lewis is urging J.P. Morgan investors to vote no on the bank’s executive pay plans. They made the same suggestion to Goldman Sachs and Morgan Stanley investors. Needless to say, Glass Lewis isn’t a fan of Wall Street pay this year.
Despite its $4 billion capital reporting error, Bank of America saw all 15 of its directors approved by shareholders on Wednesday. The bank’s executive compensation plan also received the green light, which means Chief Executive Brian Moynihan can keep his $13.1 million comp package.
Regulators have expanded their hiring probe beyond J.P. Morgan. The SEC sent letters to Credit Suisse, Goldman Sachs, Citigroup, UBS and Morgan Stanley asking for more information. The investigation centers on claims that banks broke anti-bribery laws by employing relatives of powerful government officials in Asia.
BlackRock hired White House advisor Sarah Bianchi as a managing director for its advisory unit. Elsewhere, two J.P. Morgan execs – John Anderson and Mike Camacho – have been named the bank’s co-heads of global commodities. They’re replacing Blythe Masters.
Last week, Apollo Global Management said its partners would be paid in stock that won't vest for three years. Now, two senior partners in their mid-30s are leaving the firm. Coincidence? Not a chance.
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Quote of the Day: "I love you, Mr. Moynihan!" one Bank of America shareholder shouted during the firm’s annual shareholder meeting. "You and my mother…So now I have two,” replied the bank’s CEO.