Equities staff hold a better hand

Lehman was rumoured to have paid its equities staff sparingly last year. This year the bank is advised to dig a little deeper.

According to an article in today's Financial News, Lehman's equity capital market bankers have presided over a spell of impressive growth which has seen the bank more than triple its equity capital markets (ECM) business in the last three years, despite employing one of the smallest ECM teams in the markets.

Lehman doesn't appear to have suffered as a result of the alleged paucity of last year's pay cheques. But following a year in which European IPO volumes have leapt nearly 90% according to Dealogic, one headhunter says ECM staff across the market will now be quicker to jump ship.

"There weren't as many new positions for dissatisfied ECM staff to go to in early 2006," says James Bridgman, head of the equities team at specialist financial services search firm Principal Search. "But after a good year, we're expecting more movement in 2007. Banks may need to pay high performing team members better this year in order to keep them."

Alex Williams, an equities consultant at search firm Pelham International, says the same applies for high performers in equity sales and trading. "I can't see any banks making massive hires in cash equities next year," he tells us. "But following unbundling there's growing recognition that you need very good salesmen and analysts. The market for the best people will remain strong."

Collins Stewart will reportedly be among the hirers. The UK stockbroker is hiring "across the board" for its pan-European large cap business, says one headhunter. "They have some big expansion plans," he tells us. "They're looking for salesmen and analysts."