Deconstructing the sudden equity research hiring at Nomura and Evolution

2 June 2011

2 minute read

Deconstructing the sudden equity research hiring at Nomura and Evolution

What's going on? Last thing we heard, Nomura was said to have paid its equity research staff badly and Evolution was making a lot of equity research redundancies and had raised salaries twice to stop people leaving.

Now, both places seem to be hiring.

Nomura's recruited a managing director and a vice president for its oil and gas research team, both from Morgan Stanley and says it's going to hire more. Evolution's hired a new head of its natural resources team and a new head of distribution from ICAP.

Does this mean equity research hiring is suddenly looking up again?

No.

Headhunters say Nomura's hiring is merely for replacement, to compensate for the departure of three energy analysts and one energy salesman to Citigroup in October.

However, they also claim that Nomura will need to make a lot more replacement hires in equity research soon. "The equity research bonus pool at Nomura was down 20% at least," alleges one. "And they zeroed around 25% of the team - there are a lot of disgruntled people there."

Further departures and further recruitment are also likely at Evolution. Alongside redundancies, the bank has lost numerous key members of its equities team this year including a six man consumer products team led by Warren Ackerman and Andrew Holland - allegedly to SocGen.

AUTHORSarah Butcher

Global Editor

Le
LessQmorePew
20 July 2011
The paradox in joining a firm that overpays now is that the opposite often happens. Just like driving, the lane you switch to is often slower than the lane you were in. How long can a firm consistently overpay in a competitive environment. What is the right/sustainable amount to pay? There seems to be no right formula. In a business like equities where talent attraction/retention is key, firms fluctuate between periods of overpaying & underpaying. It seems N overpaid to keep Lehman employees. This was not sustainable so now here's the correction.Thus my proposition - Join N now. Join when N is in desperate need of replacement. You will be in a better bargaining position. The news of low bonuses has already been priced in. N knows this. It has to make a decision whether to stay in this business or not. If yes, N knows that it has to pay a premium now to negate the sentiment and attract quality replacements. Those who join now will stand a higher probability of a positive surprise, less chance of further disappointment.
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