How much am I worth? Director, fixed income derivatives origination, eastern Europe

A panel of headhunters give their assessment of typical pay packages in London: Director, fixed income derivatives origination, eastern Europe; salary - 110,000- 120,000; (€165,000- €180,000), bonus upwards from 200%

The City has always been on the lookout for the next big thing - and no more so than in 2004.

This year, with 10 countries due to join the European Union at the start of May, the big thing (once again) seems to be eastern Europe: eight of the accession countries are from the region and large financial institutions in particular realise there is still money to be made there, despite growing convergence in their interest rates.

'It's been a good twelve months in emerging markets, in which performance far exceeded expectations,' said Richard Fraser of RJF Global Search, though he warned that markets in 2004 will be hard pushed to match the total returns of 25% achieved last year.

'If governments start to borrow on a larger scale and pay more for their money, investors may turn back to safer investments,' he said.

Yet for the time being, those specialising in fixed income derivatives origination are on a high. Hirings have been running strong on the back of last year's strong performance, but also in anticipation of the situation post May 1: Deutsche Bank, JP Morgan, Merrill Lynch and Citigroup are amongst the first tier institutions currently active in the field.

'The hiring market is gearing up for the expected development of both asset and liability management activities and of local market financing solutions,' says Marta Bollman-Dujols of Napier Scott.

Pay, not surprisingly, looks fairly healthy. Fraser said that directors - who generally have at least six years experience - can expect to pull in at least 120,000 basic with bonuses running anywhere between 200%-550%.

Richard Fisher of Alexander Mann Global Markets pitched the bonus at a similar level, at anywhere above 250,000. Bollman-Dujols suggested a slightly lower basic and - depending on the P&L - is also less sanguine over the bonus: she suggested the range is between 150,000-400,000.

She added there is a large gap between salary and bonus levels in London and elsewhere in Europe, where the pay is generally much lower.

So what sort of person should you be in order to become a director eastern European in fixed income derivatives origination? Fraser said you are likely to be an eastern European national - language and a knowledge of the terrain are vital - and have an excellent educational background: an MBA is increasingly common, while at degree level a 2.1 (if from the UK) is at least expected.

Given that the typical director will be involved in a range of activities - including client marketing to financial institutions /corporations as well as structuring (working out the pricing structures of credit products and derivatives) - the ideal person will be a good all rounder. As well as background knowledge of east European markets, one should have superb presentation and negotiation skills.

Any downside? Bollman-Dujols said that although the derivatives and credit derivatives markets in eastern Europe have grown strongly, structured products generally there are not as sophisticated as in western European markets, and do not generally exist on the domestic markets.

'The potential for P&L (in jobs based in eastern Europe) has remained limited and this is reflected in the average bonus payout,' she said.

However with the development of more sophisticated financial products, the pay disparity between east and west may shrink - which for anyone working in derivatives in Prague or further east can only be good news.

Figures and commentary from RJF Global Search, Napier Scott and Alexander Mann Global Markets