Bonuses Herald an Increase in Investment Bank Hiring

Financial firms are adding investment banking jobs and rebuilding staff in a big way, and offering guaranteed bonuses to lure top bankers over to their side.

Businessweek reports that five of the largest banks on Wall Street — Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc. and Morgan Stanley — increased their total headcount in the first quarter. And smaller firms such as Nomura Holdings and Jefferies Group are doing their best to recruit talent from other firms.

Compensation is up, too. Firms are reportedly paying 30 to 40 percent more to lure employees from other banks, according to a report by the Options Group, a New York-based executive search firm. Their report also said equity derivatives and commodities trading are two of the hottest, fastest-growing areas right now.

The Businessweek article noted that some firms are now offering pay packages as high as $8 million to attract investment bankers and top traders. The icing on the cake is guaranteed bonuses, which are paid regardless of how well the employee or the company performs. Industry leaders say it’s a sign that more people are beginning to be snared from other firms, rather than from the ranks of the unemployed.

Recruiters say banks including Nomura and UBS have offered top prospects one-year guarantees paying from $2 to $4 million. Some managing directors have had two-year guarantees dangled in front of them.

Things seem to be shifting back to employees being in the driver’s seat. What’s your take? Are you seeing an uptick in mobility among current bankers, with increasingly attractive compensation packages? Add your comments below.

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{ 1 comment }

Mark July 10, 2010 at 2:44 am

One of my friends is with an investment bank that survived last recession. He accepted reduced salary for obvious reasons then. Since things are looking up now, he is confident of getting into top post with right package.

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