How much am I worth? Senior credit strategist, top tier firm
A panel of specialist headhunters give their assessment of typical London pay packages: Senior credit strategist, top tier firm - salary around 100,000 (€139,000), with performance related bonus up to 300%
Conventional wisdom would suggest that when the going gets tough - and companies start going under - the outlook for credit strategists should pick up: a person capable of such valuable analysis is somebody banks want around.
Yet strategists' pay levels are falling. A Russell Reynolds survey of staff at all levels shows a 25% drop in total packages in Europe over 2002 to an average of 106,719, a fall which other headhunters corroborate.
'Credit strategy has seen a continuing reduction in headcount as well as a decrease in levels of remuneration, which have been affected by the lack of fee income in other business areas,' says James Richardson, Head of Credit Research and Analysis at Napier Scott.
Richard Fraser of RJF Global Search agrees, suggesting pay levels last year declined about 20% with banks in some cases paying no bonuses; this year there is unlikely to be an improvement.
Others are more sanguine, noting that credit strategists have had a better time of it than most. So who is right? Well, everybody.
'The job title credit strategist can mean different things to different people, from what basically amounts to a desk analyst through to high level asset allocation strategy,' says Edward Kent-Jones, a consultant at Alexander Mann Global Markets (AMGM).
He adds however that the most successful - and better paid - have a fixed income credit research or more generalised risk management background, and are thus able offer a more comparative analysis of the various credit risks.
The best paid tend to be high profile figures strong in quantitative research, who have looked at a wide range of sectors and are thus best placed to help banks develop long-term portfolio strategies.
'Typically, they liaise with the credit research team to provide a cross-sector analysis of the credit markets on a proprietary basis, as well as for the benefit of their banks' clients, and consequently assist trading teams as well as helping to determine the allocation of internal credit portfolios,' says Napier Scott's Richardson.
Such credit strategists also attract salaries that make most others in the City these days weep. Although basic credit strategists are looking at salaries starting between 40,000 and 60,000, Andrew Simpson of Hudson Highland says senior researchers can be paid total packages of between 350,000-750,000, especially in currently 'hot areas' such as high yield and corporate credit.
Kent-Jones of AMGM says a head of loan strategy at a large institution can pull in up to 1m - in a good year.
A recent survey of strategist salaries by Napier Scott shows that a managing director at a City-based bulge bracket house can expect 110,000 basic plus 350,000 bonus; a senior vice president 85,000 plus 205,000 and a vice president 75,000 plus 110,000.
Senior US-based personnel tend to command roughly 20% more across the board.
So given the vast diversity of possible salary packages, where is this market going? Recent evidence suggests that few banks are looking to significantly gear up their teams in London and few people are moving job: as a result, most search firms expect similar levels of remuneration this year to 2002.
'Opportunities on the sell side are few and far between. With the odd exception, most institutions have only two or three dedicated credit strategists, and are unlikely to making any further hires unless on a replacement basis,' says Philippa Greenwood of Mantaray Partners.
Figures and commentary supplied by Alexander Mann Global Markets, Mantaray Partners, Hudson Highland, RJF Global Search and Napier Scott Group.
