Who says government regulation is bad for the economy? The Sarbanes-Oxley Act, forged by the U.S. Congress in the flames of the WorldCom, Tyco and Enron scandals to protect investors from executive fraud, is continuing to fuel a hiring boom for top compliance talent on Wall Street.
And the pay for these jobs has never been better, recruiters and HR executives say. Demand for compliance strategists, auditors, officers and risk specialists still outpaces the ready supply, and salaries continue to move up for both the top posts and those at mid-level.
Firms are increasingly looking outside their ranks to bolster their compliance clout. Earlier this year, Goldman Sachs drafted Alan M. Cohen, its new Chief Compliance Officer (CCO), from law firm O'Melveny & Myers. Cohen was a partner and, before that, an assistant U.S. attorney in Manhattan and an anti-fraud activist.
How juicy is the take for new hires? Jay Gaines, president of Jay Gaines & Company, Inc., a Manhattan-based financial services recruitment firm, says companies are paying top dollar: $300,000 to $1 million for mid-level compliance jobs to as high as $5 million for top executives, including CCO's.
Gaines says top jobs that were paying $3 million last year are paying out closer to $5 million now, because of the supply shortage and the complexity of the job.
Marie Rice, a senior consultant at Gaines, sees pay continuing to rise for those reasons as well. 'Not only is there a premium for compliance people now, the job of compliance is getting bigger,' she says. 'The market is demanding, more than ever, people who can sort through the complexity of the law and translate that into the specific initiatives across the corporation.'
Even the most junior recruits, such as reporting officers, can demand top dollar, she says. Scrutiny of candidates, like demand, is also far more intense for these jobs than others, however.
Company payrolls are beginning to feel the pinch. According to 122,000 HR executives at 90 financial services firms surveyed by the Securities Industries Association (SIA) for its 2005 pay and bonus survey, the compliance hiring rush is putting pressure on costs, often greater than firms anticipated just after Sarbox went into effect last year.
'The supply-demand gap for compliance jobs is widening and it's a strain for companies as budgets remain tight,' says Stephen L. Carlson, vice president and director of surveys for the SIA.
Just don't expect the compliance hiring rush to cool down any time soon.
'These jobs have increased in importance, and it means we've got a bit of a bubble now as supply and demand take a while to get in synch,' says pay expert Alan Johnson, chief of Johnson Associates, Inc., a New York compensation consulting firm.
Johnson says, 'Risk and compliance jobs for the next five years will be more important than they ever were and pay will continue to be good. Nobody wants to get crucified because they didn't spend enough on compliance and risk.'
Memo to Wall Street wannabes: If you're in a job and have the skills that can help financial services firms comply with Sarbox regs, it's never been a better time to knock on some banks' doors. You may find many of them wide open.