From the monthly archives:

October 2008

The financial services industry has shed more than 100,000 jobs in the past nine months. Recruitment experts are likening this period to a huge game of “musical chairs,” with more players chasing fewer chairs. But star players with strong networks will find a chair, especially if they resist the urge to sit on the sidelines and instead get a fast start hunting for a new position.

That’s the opinion of John Challenger, CEO of Chicago-based outplacement counseling firm Challenger, Gray & Christmas, quoted in a recent article in Money online. A number of other recruitment experts added their suggestions on where to search for those elusive positions. These included:

Businesses with long time horizons: wealth management and retirement services, for example. Even private equity firms are becoming interested in companies that offer formerly dull activities such as mortgage servicing and insurance, and will need people who understand those businesses.

Small firms: smaller firms can now take advantage of top talent let go from major firms and will be snapping up experts to expand their business.

Government: the Treasury Department will need bankers to help track and value assets with the current bailout plan.

Consulting firms: with companies trying to run as lean as possible during this crisis, many will want to outsource for financial expertise rather than hire high-priced talent. Consulting firms stand to benefit and are eager to take on investment bankers.

Overseas markets: as we’ve commented in this blog before, there is growing demand for banking and finance expertise in markets such as Dubai, Asia (excluding Japan), Brazil, and other jurisdictions. This might be the perfect time to gain the international experience that looks good on any resume.

To land that next investment banking position, network like crazy says John Rogan, a managing director at recruiters Russell Reynolds Associates. “You need a multi-pronged approach. Even if you have relationships with recruiters, don’t just rely on them. Talk to everyone you know and meet as many people as you can. Stay current with what’s happening and who’s going where.”

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The top five corporate executives at banks participating in the government’s bailout program could conceivably have to give back their bonuses, according to a recent article in The Deal. That would happen if the benchmarks used to grant the bonuses were based on “materially inaccurate financial statements” or other inaccurate performance data. In these cases, the company boards would be forced to recover the bonuses.

These measures are even tougher than similar rules put forth under Sarbanes-Oxley in 2002. At that time, boards had to prove that CEOs or CFOs intentionally mislead the company. But with the new regulations, financial statements just have to be wrong to trigger a claw back on bonuses.

Another new restriction prohibits banks who are receiving Treasury money from offering golden parachutes to their top five executives, for as long as the institution is taking federal funds. This could limit a bank’s ability to attract top talent, until they buy out the Treasury’s stake in their business.

Moving forward, executives may opt for private equity jobs and stay away from highly regulated banks, says Temple University Business School professor Steven Balsam. It’s also becoming harder for boards to justify stratospheric compensation plans to shareholders, given the current political environment, leading to further cuts in CEO pay.

Expect more restrictions in the future. House Financial Services Committee Chairman Barney Frank (D-Mass.) plans to introduce new CEO pay legislation in 2009. A stronger, Democratic-controlled Congress may take major steps to clamp down on CEO pay excesses, using the bailout regulations as a guideline.

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It is time again to assess where the private equity industry is headed with regard to compensation levels. If you work for a venture capital or private equity firm, you are invited to participate in Job Search Digest’s annual Private Equity and VC Compensation survey, which we are conducting to provide information to evaluate compensation, negotiate better job offers, and benchmark firm compensation practices. We take great care to produce the most comprehensive and accurate survey in the industry.

We had such tremendous response last year, we know this year will provide outstanding results. Last year hundreds of respondents from around the world completed the survey. We had participation from firms both large and small such as: Credit Suisse, Labrador Ventures, Intel Capital, Mayfield, New Enterprise Associates, and SoftBank Capital. The survey addresses issues such as the compensation earned by professionals and their work satisfaction.

If you work for a venture capital or private equity firm click here to take the Private Equity and VC Compensation Survey

And please point your friends in the industry to this link because every additional response benefits all participants.

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Bailout Could Restrict CEO Pay Packages Part I

October 27, 2008

With the massive bailout announced on Capital Hill, top executives at participating institutions are facing unprecedented federal limits on their pay packages. But this attempt to limit CEO pay could have far-reaching and unintended consequences, reports TheDeal. One measure prohibits participating banks from deducting from taxable income more than $500,000 a year for base salaries […]

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Investment Banking Industry Turned Inside Out

October 23, 2008

The world financial system has been shaken to its core and turned inside out in the past month says columnist William Wright, in a recent article in Dow Jones Financial News online. Wright notes 10 ways he thinks the investment banking industry has changed forever, and what it means for those seeking jobs in investment […]

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Investment Banking Jobs Abroad Beckon

October 22, 2008

Executive recruiters are reporting that more financial professionals are looking for work overseas, and are more willing to relocate for the sake of job security. A recent survey by the executive search firm Korn/Ferry International, reported in the Wall Street Journal, found that more than half of 438 respondents felt the best job opportunities are […]

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Future Bankers See the Flip Side to Financial Crisis

October 21, 2008

You might think current undergraduates would flee from pursuing a job in investment banking in this environment, right? But some forward-thinking grads see a silver lining amid the clouds, according to online financial forum Although the number of grads applying for investment banking jobs is down and students showing up at campus events are […]

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