Russian banks win pay race

Where should you work if you want to be paid up this year? Look no further than Russia's domestic investment banks.

Lehman Brothers and ABN AMRO have both announced plans to bulk up in Russia this week. If headhunters are right, snaring staff in the face of native competition will not be easy.

Andrea Williams, a consultant at JBS Associates, a Moscow headhunter, says Russian banks are offering guaranteed packages for periods ranging between one and (a massive) three years. "They will pay 40% more than their Western European and US rivals," she adds.

Western banks already suffering a talent drain to Russian rivals are said to include Citigroup, Credit Suisse, ABN Amro and BNP Paribas. "The problem with Western banks is that, while they sometimes have a generous fixed compensation, the bonus system is rather stable. It doesn't matter if you had a great or a bad year, the bonus is similar," Elena Birenberg, a consultant at the Moscow headhunter Pynes & Moerner, tells us.

Despite uncertainties over Russia's investment climate and the recent assassination of a reformist central banker, Williams predicts this year's surge in recruitment and salaries will persist in 2007: "Houses are looking at 50% increases in staff recruitment with package increases on offer of more than 50% in M&A, for example, compared to last year."

But while Russian banks may offer highly competitive packages to Russian-speaking bankers from Paris and London, headhunters warn against short-term thinking: First-tier banks such as Goldman Sachs and Lehman may apparently offer the superior, long-term career opportunity.