How much am I worth? Gilt-edged market-maker
A panel of specialist headhunters give their assessment of typical London pay packages: gilt-edged market maker, leading international house - salary 100,000-140,000; bonus - up to 600% for the best.
In these days of uncertainty, it is dangerous to take anything for granted. Not least one's career.
For most folk in the City of London 'job security' is a quaint concept evoking nostalgia for something long gone rather than a realistic description of what is available.
Yet if you want to stay in demand, there are few positions better than a GEMM, or gilt-edged market maker.
'GEMMs are a special breed, somewhat like the Cheshire horse. They're old and established...and they're damn all use except for the job they do where they are totally indispensable,' says Shaun Springer of Napier Scott.
GEMMs - primary dealers in UK government securities - are not called that for nothing. A select group of some 40-50 individuals operating in just 16 institutions, they know their market back to front (and presumably, inside out). Their value reflects the fact they operate something like a closed shop: newcomers are rare and in the event of a market downturn usually the first to lose their jobs.
As Springer puts it: 'Their future is assured for as long as they want it to be: if the P&L starts look shaky they can fire their back-up, thereby ensuring no one else in the bank can do the job.'
So how do you get to be a GEMM? Well, good mathematical and quantitative skills are a must -with many GEMMs having at least a Master's degree if not a PhD - as are good computer skills and excellent contacts.
Many become GEMMs after an apprenticeship to a senior gilts trader: all are quick thinkers able to react quickly and imaginatively to rapidly changing circumstances, and most now are conversant with exotic trades as well as the more traditional vanilla ones.
So how much can a GEMM expect to earn? Charles Hammill-Stewart of Alexander Mann Global Markets says an accomplished trader will have a package of about 250,000, including a base salry ranging from 90,000-150,000.
Springer says top-drawer GEMMs can pull in a bonus of 400%-600% though this would be exceptional and very much performance-related.
Richard Fraser of RJF Global Search says a GEMM with three to five years experience is looking at a salary of between 65,000-90,000 plus bonus of 50%-250%; those with over five years experience a salary of 85,000-135,000 plus a bonus of 100%-600%, while for the truly exceptional few - in a good year - 1 million-plus packages are not unheard of.
Headhunters say the market for GEMMs at present is buoyant thanks to the UK government increasing its debt and the prospect of euro membership receding, for the time being at least.
'Most traders have had a very profitable start to the year with the immediate future looking good: last year was very buoyant,' says Fraser.
He says there has been some movement in the market, with a few banks poaching experienced traders to ramp up their profile in the primary and secondary markets.
Despite the possibility of eventual euro membership overshadowing GEMMs in the long term, their more immediate prospects continue to be determined by the liquidity of the gilt market and product availability; things that are in turn reliant upon UK Treasury funding requirements and gilt issues.
Most economists feel the UK's recent budget was based on overly optimistic forecasts of future economic growth. If they turn out to be correct, government borrowing may have to rise further.
In which case GEMMs can expect to find their services much in demand, which can only be good for their own bottom line.
Figures and commentary by RJF Global Search, Napier Scott Group and Alexander Mann Global Markets.
