Director of Equity Financing, FINAM Investment Company, Moscow
Alfa Bank employees
Last Friday Russia's Vedomosti Daily released an article ("Investment Banking - Sounds Expensive") which had some interesting numbers. It quotes the manager of one international headhunting firm: "there are lots of publications that create excitement for the issue -- we get many calls from New York, from people want to come to Russia. They think that you can get money for nothing here. On the contrary, the selection process is quite tough: there is a need [among the investment banks] for [people with] some experience of working in Russia, understanding the clients and international class."
The paper cites numbers for annual compensation at Russia's top ten investment banks:
- Managing directors/heads of investment banking divisions: $0.8-3.0 million
- Executive directors/ heads of back offices: $250,000-500,000
- Heads of asset management divisions: $0.6-1.2 million
- Heads of securities trading divisions: $0.6-1.2 million
- Directors of corporate finance: $0.5-1.5 million
- Heads of analytics departments: $0.6-1.5 million
Some other interesting facts reported by Vedomosti Daily:
For Renaissance Capital the average annual compensation of board members is over $2 million, while for the average employee monthly compensation is $20,800. For Troika Dialog the average monthly compensation for the employees increased by 30% over 2006, and is now $16,400 per month.
Renaissance Capital CEO Stephen Jennings
This situation, according to Vedomosti, has surprised even the wildest expectations of the headhunting agencies. One recent example is Ed Kaufman, who recently joined Alfa Bank, and was guaranteed an annual compensation package worth $7-8 million. Last year Goldman Sachs, (NYSE:GS) was stunned to hear Russian securities salesmen being recruited from UralSib (RTC:USBN) and Alfa Bank suggest during their interviews that they merited $2-3 million a year in compensation. After several months, Raiffeisen Bank (WBAG:RIBH) has failed to find an acceptable candidate to direct its brokerage division, even though the position pays half a million dollars per year.
Vedomosti cites one manager of a headhunting agency saying that several banks are still are in the process of composing their teams. Lehman Brothers (NYSE:LEH) and Nomura (NYSE:NMR) are two examples of banks ramping up their investment banking operations in Russia -- and this should lead to even more fierce competition and higher pay for executives.
You can read the original post at Vladimir Kuznetsov's blog, Equity Financing in Russia. The views expressed in this post and on his blog are the personal opinions of Vladimir Kuznetsov, and are reproduced here solely for educational purposes. To read more Russia Blog posts about Russian capital markets, click on the finance section or type www.russiablog.org/finance in your web browser.