Seems like everyone and his brother is examining the size of banker Stephen Trauber's potential $30 million paycheck at Citibank, and asking if it's just too big a commitment for the bank and and its shareholders.
One question: Can former powerhouses like Citi make a clean comeback - and once again offer big bucks - without getting in over their heads. Far-fetched? Maybe not, considering the energy sector's current sizzle, its revenue-producing record and its ability to reward top talent and star relationships.
Trauber's compensation reflects the fact "energy and commodities are among the hottest areas on Wall Street, primarily driven by emerging markets in Brazil, China and India that are now becoming developed," says Richard G. Lipstein of Boyden Executive Search in New York.
"I wouldn't say there's excess here," Lipstein says. "Citibank may have had its troubles but it is still among one of the premiere global banks in reach and product capabilities." Moreover, it's building its franchise in an important sector.
Trauber's Houston energy office is widely considered "the best division at UBS," so his jump must be considered "a big fist to the v for UBS and as a decent win for Citi, long regarded as the bottom tier in that department (even behind the energy boutiques)."
At UBS, Trauber's group produced some $200 million this year in gross revenues advising on public offerings and deals, including Smith International Inc.'s $11 billion sale to Schlumberger Ltd., one person told The Wall Street Journal.
Things to Come?
The energy sector is awash with opportunities for professionals of all stripes. Investment professionals in emerging markets and its ubiquitous energy segment are in high demand with potential paychecks to match. Recently Francisco Alzuru, lead portfolio manager and managing director of emerging markets research for Hansberger Global Investments in Fort Lauderdale, expressed interest in interviewing an acquaintance, a sell-side analyst in Brazil. The colleague - already making well over $600,000 a year - joked that "You can't afford me."
Where the Jobs Are
Look for opportunities with:
Alternative Energy: Widely viewed as the "new biotech," the sector is attracting substantial interest from the private equity community, says Lipstein. UBS recently formed a renewable energy and clean technology investment banking unit to provide capital-raising and strategic-advisory services to clients in those sectors.
Hedge Funds, CTAs and CPOs: "On the hedge fund and prop trading side of it, commodity specialists, systematic futures traders, high frequency futures quants/traders have been hot for at least a year now," reports Kyle Ramkisoon of recruiter IJC Partners in New York. "It's a fantastic asset class and we simply cannot find enough of these guys out there with great track records." Also consider commodity trading advisors and commodity pool operators. Energy-focused hedge funds are also scouting for talent.
Corporations Seeking Wall Street talent: Lipstein is working on a search for a global power and utilities company seeking a head of North American M&A. His client wants someone with a record in originating and executing relevant transactions, experience with cross-border M&A, and good industry contacts. Also important is having a "sincere interest in eventually moving to the corporate side in an operating or strategic role." That's a path not everyone on Wall Street wants to follow.