How much am I worth? Senior equity derivatives quantitative analyst, top tier bank

A panel of specialist headhunters give their assessment of typical London pay packages: senior equity derivatives quantitative analyst, top tier bank - salary 85,000 -120,000; bonus up to 300%.

There are those who are bad at math, those who are good and a few - really, just a few - who are so good they are conversant in areas most of us have never heard of, such as stochastic calculus, C++ programming and martingales.

Such people make perfect equity derivatives quantitative analysts and can expect a salary to match their rarified skills.

'Senior staff will typically have a highly mathematical PhD, including engineering and physics...those who combine a strong theoretical background with financial awareness and good communication skills are the most valuable and thus the most highly paid,' says James Diggins of Alexander Mann Global Markets.

Equity derivatives quantitative analysts, or quants, have had a good time of it recently, their rarity value (many move on to to become derivatives traders) boosting the current imbalance between supply and demand.

Banks are keener than ever to use complex exotic equity products in a volatile market. This has further boosted demand for this type of employee, as has the growing familiarity of clients with such offerings.

'This area has seen a revival this year (as a result of) the increased activity within the hybrid market, with almost every institution trying to gear up capabilities in credit/equity and IR/equity products,' says Shaun Springer of Napier Scott.

The spread of remuneration has been very wide, reflecting different performances of the bulge bracket banks in equity derivatives, says Springer.

Richard Fraser of RJF Global says there is significant demand for quantitative analysts whose pricing models are used across all asset classes and who can demonstrate a good track record.

'Those with experience of working in an environment of idea cross-fertilisation are particularly well-placed,' he says, suggesting those with four years plus can pull in a total package of 375,000. Those starting out in the area can get paid anywhere between 60,000-160,000.

Senior equity derrivatives quants are increasingly viewed as valuable members of the team, expected to be highly business focused and often based on the trading floor where their calculations can be put to immediate effect.

With the bottom line now more important than ever, pure research - for its own sake - into, say, derivative pricing is long gone. 'Quantitative analysts able to deliver usable tools to a trading desk in a short space of time are well paid as their efforts directly influence the profitability of that desk,' says Diggins at AMGM.

He says equity derivatives has remained a profitable area for most firms while their cash businesses have suffered.

Most headhunters agree that although some uncertainty hangs over prospects for senior equity derivatives quants - reflecting the general downbeat mood in the City - demand is expected to remain solid and relatively inelastic.

Andrew Simpson of Hudson Highland believes 'appetite and higher compensation will grow', with those closely involved in client business in particular often worth 250,000-350,000 in total compensation.

Figures and commentary supplied by Alexander Mann Global Markets, RJF Global Search, Napier Scott and Hudson Highland