Salary survey: Structured finance bonuses soar

Issuance of structured finance instruments has soared in recent months as institutions look for a cheap means of raising short-term funding and restructuring their balance sheets.

This surge in demand for such instruments as collateralised debt obligations and credit derivatives has led to a more buoyant recruitment market in London despite the economic downturn.

The need for structured finance professionals has held salary levels steady and pushed bonuses up a long way, according to a survey by the remuneration consultancy the Monks Partnership. It looked at structured finance departments of small to medium-sized firms.

Median salaries of assistant directors in structured finance remained just about level with last year at 73,000, but bonuses jumped skywards from 22% of salary to 77%, figures compiled in May this year show. Pay at larger firms can be much higher.

Structured finance managers also enjoyed a rise in bonuses, to 37% of salary from 20% the previous year. Median salaries for managers in structured finance inched up slightly from 50,000 to 53,000.

Median salary for structured finance officers increased slightly to 39,000 from 37,000. Officers did not however see such a dramatic rise in bonuses as their colleagues. Median bonus as a percentage of base salary remained below the 20% mark.

The popularity of structured instruments and those with the intricate knowledge of how to arrange them does not appear to abating.

Heinz Geyer, a recruitment consultant at Temple Associates, said: &quotStructured finance is definitely a strong area in the recruitment market. A lot of action is in credit derivatives where there is a demand for staff who can asses credit structures. The buy-side, sell-side and the rating agencies all are expanding."

Ratings agencies in particular have been on the recruiting band wagon recently after being caught out by the collapse of Enron, which was partly the result of misuse of structured instruments. They are looking for structured finance staff to make sure they are not caught out by similar problems if they arise at other companies.

Other positions surveyed by Monks include commercial property finance, where bonuses have also risen. Lower interest rates and a flight out of equities have contributed to a renewed interest in commercial property since its bleaker days early last decade.

The continued success and early payment return from the developers of Canary Wharf highlights the demand for commercial property financiers.

Heads of commercial property finance won a rise in median salary from 92,000 to 100,000 this year, along with a spike in bonus pay from 34% of salary to 59%.

Salaries and bonuses of for professionals in project finance roles remained largely flat over the past year, mirroring the downturn in mergers and acquisitions. Heads of project finance earned the same median salary this year as they did last, but were able to achieve a slight increase in bonuses from 32% to 39%.