How much am I worth? Managing director, head of convertible bonds

A panel of specialist headhunters give their assessment of typical London pay packages: managing director, head of convertible bonds - salary 100,000-150,000; bonus up to 500%

The recent rise in share prices has been watched nervously across the City, with almost everyone hoping the rally marks the end of the bear market. If it does, few will be more relieved than those who work in the convertible bond industry.

Before the current slump, most large investment banks had a convertible bond group as a key, intrinsic part of their capital markets business.

In Europe, the trend was large, €1billon projects, with hedge funds responsible for most of both the primary and secondary market. In the US the emphasis was on smaller but more numerous trades by start-ups and small companies needing finance but unwilling to issue bonds or equities.

The average revenues generated by a convertible bond business have fallen by half since 2001, says Ben Leslie of Napier Scott, noting that the decline in share prices is responsible for the slide in convertible bond business.

Mark Horlock of Alexander Mann Global Markets is equally downbeat. 'New issuance in 2002 was nearly half 2001 levels and secondary markets volumes also declined. There has been very little movement in the people market in recent months.'

Not surprisingly then, the fortunes of heads of convertible bonds have taken a bit of a battering, with declining revenues leading to a smaller bonus pool. The problem has been accentuated at many institutions by a reluctance to lay off personnel - in the hope of an imminent recovery in the convertible industry.

This has meant many convertibles teams remain the same size as in the boom days of 1999/2000. Estimates vary but Leslie believes bonuses this year are down between 50% and 80%.

Attempts to add value and differentiate service from that offered by other institutions - by offering special bespoke products - has tended to put further pressure on bonuses, as (expensive) specialists in bridge financing, taxation, corporate and credit rating issues have had to be bought in.

That said, heads of convertible bonds still pull in a respectable salary. Horlock says a head of convertibles - coming typically from an equity derivatives background - can expect a base salary of between 100,000-150,000, with bonuses up to 500%.

Leslie agrees, noting that convertible bonds heads have usually been active in the product area for over 10 years, coming generally from convertible bond sales or trading backgrounds.

Even for the best, salary expectations have been driven downwards, though by current City of London standards remuneration is still pretty high.

'Given the difficulties of the past 18 months and the likely continuance of this in the coming year, convertible bonds heads at bulge bracket firms will be lucky if they get a package greater than 1.3 million,' says Leslie, adding that bonuses are very much success-driven.

One lucky individual recently got a single bonus award of 2.5 million. Good money if you can get it.

Figures and commentary by Alexander Mann Global Markets (AMGM) and Napier Scott.