How much am I worth? Commodities trader, energy sector

A panel of specialist headhunters give their assessment of typical London pay packages: Commodities trader, energy sector: salary 70,000-100,000 with 3 to 5 years experience, bonus up to 300%

By any standards, this has not been a good year for careers in commodity

trading - even for those focusing on the most dynamic sector, energy.

Given a backdrop of oil at $28-$30 a barrel and high gas prices, things should be

booming; the fact that this high price conceals an Iraq risk-premium, rather

than lack of supply or excess demand, has complicated matters.

"Some energy companies are sitting on record inventories which means nobody

knows which way the market's going to go," says Simon Hughes, commodities

specialist at Marshall Warburton.

Then there is the depressing specter of Enron, whose vast size and ambition

once enabled it to soak people up, even if this didn't win market share. Its

collapse has led to retrenchment among US companies and their

withdrawal from European markets.

"There are a lot of people I think are very good who simply cannot get

work," says Hughes, who believes employment in the energy trading market

has been halved by Enron's collapse.

"What we are now seeing is a market in oversupply, yet only a couple of

years ago it was experiencing a severe skills shortage," agrees Colleen

Quilty, principal consultant for Alexander Mann Global Markets, about what

has very much become a buyers market.

"There are some very talented individuals available but far fewer opportunities for them."

Headhunters argue that career options for commodities traders have not been helped by the fact that at the senior end it is a niche market which few search firms focus on.

As a result, candidates seeking a good position in a well-established, asset-backed organization are likely to be unusually flexible about their pay.

So what sort of salary can an energy trader expect these days?

Headhunters are quick to point out that this very much depends on whether

the position is within a bank, an oil major or a trading company, and whether there is a derivatives element - in which case, of course the salary is always higher - and whether

the trading concerned is physical or futures-based.

In banking, an average junior trader with 1-3 years' experience could earn between 50,000 to

70,000 basic; a trader with 3 to 5 years experience could earn between

70,000 to 100,000.

For 5 or more years experience, this would rise to between 100,000 to 150,000, with basic salaries rarely exceeding this even at MD level.

For those who have a good year and pull in a lot of business the rewards get much better: those at the middle level can expect a bonus two or three times their basic salary whilst top dogs can do better still.

But in a bad year Hughes warns that bonuses can be zero, particularly further down the food chain.

Commodity traders in other types of organisation will do less well at the basic level, where salaries can be 20% lower. But at the more entrepreneurial trading companies they can expect even more bonus, particularly where individual performance has been outstanding.

And the good news is that although the market has got tighter, with professionals with many years of expertise desperate to get back into the market, for those in situ salaries are not

being driven down.

AMGM's Quilty says that as conditions get tougher, there has been a flight to quality.

"We have seen that our clients do not want to take chances in the current

climate and a premium has been shown to those at the top end of the market

in terms of experience," she says.

Contributors include Alexander Mann Global Markets and Marshall

Warburton