Structured finance staff hit by reduced bonuses

Senior structured finance staff suffered big falls in bonuses last year in spite of strong activity in the sector.

Bonuses of heads of structured finance dropped to an average of 92% of salary from 129% in 2001, according to a pay survey of small and medium-sized London-based employers by the Monks remuneration consultancy.

Longbridge, the headhunter, says structured finance bonuses at large banks also fell last year by an average of 25%. However, they were often much higher than at smaller companies, with managing directors taking home up to 350% in 2002 and directors receiving up to 200%.

Headhunters say some banks are recruiting structured finance staff this year in response to strong demand in such areas as residential mortgage-backed securitisation and whole-business securitisation.

Clare Harris, a consultant at Longbridge, says WestLB, Royal Bank of Scotland and UBS are among those that have recently hired staff in asset-backed securitisation.

She says: "Many banks run structured solutions groups which tend to include structured credit and interest rate derivatives. Some of these teams have been hiring extra staff, either from inside the bank or externally."

However, Gilbert Swann, a consultant at search firm Sheffield Haworth, says hiring in structured finance remains selective. Banks tend to recruit individuals rather than teams and are often replacing existing staff with more highly skilled specialists.

Harris says Germany is a relatively buoyant area, notably in real estate securitisation. US banks in particular are trying to hire in this sector, which has traditionally been the preserve of German banks. The Italian market is quieter than last year.