Banker’s dilemma: “I haven’t had a pay rise for 4 years and my only alternative job offer won't pay the mortgage"
"Can you help? I'm an American banker working in London and am wondering whether to take a new job.
I've been doing my current director-level role for four years and am paid a salary of £170k, plus a flexible bonus. I haven't had a pay rise since I started. I'm too scared to ask for one as the European bank I work for hasn't been doing well recently.
I've just been offered an interesting new job at a North American investment bank in London. The only downside is the pay - instead of a salary of £170k, I'm being offered a salary of £125k, plus a fixed payment of £45k. That fixed payment isn't pensionable and could be removed at any moment. If it was (removed), I wouldn't be able to afford the mortgage on my house.
Can anyone advise me on the best course of action? Is this kind of pay arrangement common now? If so, how does anyone change jobs? What's a seasoned banker to do?"
Our experts say:
1. This is becoming fairly normal
"It's happened to my candidates a few times this year," says James Kennedy at NJF Search in London. "It's usually because companies have got headcount to hire at VP level and they're hiring a director level candidate. The director wants to move and the VP's base salary is capped, so the bank has to offer an allowance."
VP salaries are typically capped around £130k-£150k, says Kennedy. Director salaries are usually capped around £150k to £170k.
2. You have to make a mix-n-match decision based on the best compensation mix for you
"Over the past few years, there's been a tendency for banks to offer a wide menu of potential benefits," says another headhunter, speaking entirely off the record. "Some banks will offer a lower salary but higher benefits which can bring the total package up. From their point of view, it's all about keeping their fixed base down and reducing their legal and pension commitments. From your point of view, you need to decide whether you value your current high salary but precarious job more than a lower salary and precarious fixed payment at a new employer. From your comments, it seems you should stay put."
If you have advice on solving this dilemma, please add it to the comments box below. If you wish to have your own finance careers dilemma solved, please email us at Editor@eFinancialCareers.com
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