Compensation Stable for Energy Risk Professionals

Risk professionals in the energy sector received modest compensation increases during 2005, but should benefit if investment banks and hedge funds increase their activity in the area and the markets' instability continues.

Compensation for risk professionals in energy businesses grew 5 percent in 2005. Cash bonuses made up between 33 and 35 percent of senior executives' total packages, and comprised 13 to 17 percent of compensation for associates, managers and directors.

While stable, the growth is lower than that for risk professionals at investment banks and asset management firms, said Risk Talent Associates, whose second annual Professional Compensation Survey included the figures.

Managing directors and chief risk officers earned average total compensation of $316,000 in 2005, up from $307,000 the year before. Associates/analysts earned $90,000, up from $86,000 in 2004.

Jim Heneghan, managing director with RTA, foresees continued demand for risk professionals with a background in oil and gas. "Many major investment banks have refocused on the energy space, and more hedge funds are trading in the energy markets," he said. "As long as there is instability in the markets, there will be healthy demand for risk professionals who understand oil and gas products."