Bonuses in securitisation prove weak

Though hiring has been on the rise for securitisation professionals, employees in the sector received disappointing bonuses this year, a survey shows.

Clare Harris, a director at Alexander Mann Financial Markets, says 2004 bonuses in securitisation were in line with 2003: 'A lot of people were expecting bonus levels to be up and there are a number of disappointed individuals in the market.'

Although a few top performers received bonuses 10% to 15% higher than 2004, Harris says increases were lower than in previous years. Securitisation specialists who brought in additional revenues for the firm felt they had not been rewarded for their efforts.

Alexander Mann surveyed 50 securitisation professionals in the City of London market in January and early February 2005.

The results suggested a director working in commercial mortgage backed securitisation (CMBS), residential mortgage backed securitisation, or whole business securitisation, earned an average salary last year of 100,000, plus a bonus of 250,000 to 600,000. A vice president in the same area could earn an average salary of 75,000, plus a bonus of 100,000 to 225,000.

Professionals in the CMBS sector were at the top of this range and should remain well remunerated in 2005: 'We continue to see demand for CMBS expertise which is driving prices up,' Harris says. A shortage of CMBS specialists is forcing banks to recruit from outside the industry. Last week, for example, Bear Stearns hired Adam Toft, an analyst from Moody's, the rating agency.

Harris says strong demand for CMBS professionals contrasts with the conduit finance and consumer asset backed securitisation (ABS) sectors, which are well staffed. Salaries in conduit finance and consumer ABS were equivalent to the CMBS sector, but bonuses were lower: from 175,000 to 300,000 for directors and 75,000 to 150,000 for VPs.

sbutcher@efinancialcareers.com