M&A fees up, pay not
News reports suggest fees for corporate finance work are rising, but recruiters say bankers have yet to benefit from the increases.
"Banks are being a lot more conscious about pay than they were in 2000," says Isabel Martin, European head of the financial services division at search firm Korn/Ferry International. "They've imposed different bands of compensation for different types of people and are trying to stick to them as closely as they can."
Other search consultants confirm that corporate finance pay is proving somewhat slow to respond to the current upsurge in business. "Banks are finding pay rises very resistable indeed," says one. "It's good news - there will be fewer redundancies when the next downturn hits."
Guaranteed bonuses for job changers are said to be correspondingly rare, unlike the plenteous days of 2000. One consultant attributes this to low fees: "People are saying that although deal volumes are up, fees are still squeezed massively."
A recent article on Bloomberg suggests otherwise, however. Quoting no less than Vittorio Pignatti, 48, co-head of European M&A at Lehman, and Philip Keevil, a former head of Citigroup European M&A unit turned senior partner at boutique Compass Advisers, the news service argues M&A fees are on the way up.
``Fee levels are increasing again,'' says Keevil. ``There is more business available, so there's less need to undercut fees.''
That message may be slowly filtering to bankers. One recruiter says most senior corporate financiers are expecting to paid 20% more in 2006 than in 2005, and expect a further 10% premium as an enticement to move into new job.
