How much am I worth? Multi-product derivatives marketer

A panel of headhunters gives its assessment of typical London pay packages:

For four to five years experience, total compensation between 300,000-400,000 (€432,000-€575,000).

Financial fashions come and go, but one of the few best-dressed constants in recent years has been derivatives.

With this once rather exotic product now increasingly viewed as a reasonable hedging instrument, investors cannot get enough, which has meant financial institutions falling over themselves to make sure they have enough good people.

And with the focus on finding new products stronger than ever, the derivatives marketer has become one of the best-paid people in the City of London.

Individuals with strong product knowledge, however, are in relative short supply. Dominic Kennedy with search firm Napier Scott says, 'Derivative marketers flexible enough to market a variety of different products are much in demand and will remain so over the long term, though of course the product range will continue to grow in sophistication.'

Richard Fraser of RJF Global Search concurs, adding that aside from a slowdown in the third quarter of 2004, this has been a strong year for recruitment: corporate business and institutional investor revenues have been up, with institutions hungry to recruit the best.

'Derivatives marketers with multi-product exposure from credit expertise, foreign exchange, interest rate, and equity have all been strongly in demand,' he says, adding that first- and second-tier institutions have been supporting already high salary levels, while almost everyone has been looking to upgrade their teams.

Active hirers at the moment include Barclays, Dresdner Bank, HSBC and the Royal Bank of Scotland. So how much can the well-placed and connected derivatives marketer - with strong market savvy and, dare one say it, good gift of the gab - expect to earn?

Kennedy says the really top marketers - who can generate, say, 30m of business a year - will be looking at 1.5 million in total income, with some pulling in even more than that. For less Olympian figures, sitting on a P&L of about 4.5-5m, things are still pretty divine: total compensation could be anywhere between 300-550,000, with the final figure depending totally on performance.

Fraser suggests an even broader range of remuneration, between 125,000-475,000 for individuals for four to five years experience, rising to between 275,000-875,000 for those who've managed to stay in the business for six or more years.

And this year? The downside is that while many banks have had a good year, it has not been the bumper one that they were expecting. Recruiters disagree on what this might mean for derivatives marketers: Kennedy says total remuneration should be up between 5-15% while Fraser expects pay to be much the same as last year.

The usual scramble for possible new opportunities - or 'active market liquidity' to use headhunter-speak - happens once bonuses are paid out. However, most should also be thanking their lucky stars they work in this most remunerative of careers. 'This group of individuals will continue to enjoy the best pay packets amongst their colleagues in other sales areas,' says Kennedy.

Comments and Figures supplied by RJF Global Search and Napier Scott