Overview
The average salary increase achieved by risk managers moving jobs increased from 7% in the first half of 2009 to 9% in the second. Whilst this should be seen in the more usual context of the 20% increases that have historically been achieved, there are conflicting pressures on salaries, particularly in banking. There is a pool of redundant risk managers who are prepared to accept lower salaries than they were previously earning and more generally there is a focus on qualitative rather than simply quantitative factors, such as salary and remuneration. These factors are mitigating against higher salary increases. However, banking candidates who are already gainfully employed are demanding significant increases to not only compensate them for the risk of moving employer, but also in anticipation of smaller bonuses. Those moving are often asking for a 20-30% uplift, whereas banks are more prepared to offer 10%.
Unfortunately bankers’ remuneration is currently in the political spotlight. The message from Westminster has been contradictory with government wanting to keep the City competitive whilst at the same time curbing excessive pay. Unless there is a unified global response towards capping remuneration, any unilateral measure is likely to be counterproductive. This largely applies to front office employees; however, remuneration for risk managers has also come under scrutiny. Going forward, hidden in the FSA’s remuneration document, among statements about deferrals and stopping multi-year guarantees, is the suggestion that bonuses within risk and compliance functions should not be linked to the performance of the business. This could lead to higher base salaries or bonuses being linked to risk managers being able to clearly demonstrate mitigation of large risk events. Either way, it is still unclear at this stage as to how risk manager’s compensation in banks will be structured in future.
Outlook
The future of bank bonuses will obviously be a complicating factor. However, aside from this, the risk management market will no doubt be more generally subject to the laws of supply and demand. The partial recovery of salaries that occurred in the second half of 2009 should continue. This will be consistent with an improved economic climate, an anticipated increase in demand and a modest easing of competition for less specialised roles. However, the environment for risk management salaries will need to be seen in the context of continuing sub trend economic growth and a general rise in unemployment for some months yet. Pressure on the profits of the financial services industry is likely to continue. We estimate that any significant rises in risk management salaries will not come before late 2010 at the earliest.
Salary Survey
Barclay Simpson analyses the salary data that accumulates from the placements we make in the UK. This provides a useful guide to salaries and salary trends for risk management professionals.
To give as accurate a picture as possible, we have taken a range of different risk management profiles and provided an approximate salary range that they could realistically earn. The profiles are for good rather than exceptional individuals and take no account of other benefits in addition to the salary that usually accrues to risk professionals, such as bonuses, profit sharing arrangements or pension benefits. The ranges indicate London salaries, which are generally 10-15% higher than provincial salaries.
1-5 years experience
| Credit risk |
Salary |
Credit Risk Reporting, Corporate / Investment / Retail Banking
Responsibility for compiling MI and reports for use by board, regulators, rating agencies, sales / trading and credit department. |
£35,000 - £45,000 |
Credit Analyst, Corporate Banking
Graduate with banking experience. Middle office role on Corporate or FI portfolio. |
£35,000 - £60,000 |
Credit Analyst, Project / Leveraged Finance
Graduate with specific banking experience in an area of specialised lending. Middle / front office. |
£40,000 - £70,000 |
| Market risk |
Salary |
Market Risk Analyst
Graduate in Mathematics or related discipline (ideally with MSc). Experience in Market Risk including VaR and stress testing. Excel & VBA skills. |
£35,000 - £55,000 |
Risk Analyst – Model Validation
MSc in Mathematics or related discipline. Risk Management background with experience in risk quantification techniques and managing the validation process for new valuation models. Strong technical skills (Excel, VBA). |
£40,000 - £60,000 |
Quantitative Analytics / Analyst
PhD in Maths, Physics or Engineering. Excellent technical and mathematical skills. Experience in creating and building quantitative models according to front office trading requirements. |
£55,000 - £80,000 |
| Operational risk |
Salary |
Risk Analyst, Investment Management
Graduate within operational risk in investment management. |
£35,000 - £45,000 |
Operational Risk Analyst, Insurance
Numerate school leaver with a general awareness of risk and control methodologies in the insurance or life sector. |
£30,000 - £40,000 |
Group Operational Risk Analyst, Retail Banking
Graduate with practical experience of Group operational risk management policies and procedures within a retail bank. |
£35,000 - £45,000 |
5-10 years experience
Credit risk |
Salary |
Credit Manager
Graduate with credit counterparty analysis experience from the banking sector, with sanctioning authority or line management. |
£60,000 - £80,000 |
Counterparty Credit Risk Manager, Investment Bank
Graduate with credit risk experience from the banking sector. |
£50,000 - £60,000 |
AD Credit Officer – Private Banking / Wealth Management
Good wealth product knowledge, degree educated and with some level of lending discretion. |
£55,000 - £60,000 |
Credit Sanctioner - Investment Banking
Graduate with strong focus on credit, often sector or product specific and with significant level of lending discretion. |
£70,000 - £90,000 |
| Market risk |
Salary |
Market & Liquidity Risk Manager, Banking
Value at Risk PhD working on the capital allocation programme within the insurance sector. |
£65,000 - £85,000 |
Portfolio Risk Manager, Fund Management
Graduate with risk management experience with the Big 4 and the fund management industry. |
£65,000 - £75,000 |
Market Risk Manager
Graduate in Maths or related discipline. Ideally MSc. Experience in providing risk analysis and commentary for senior management, investigating risk profiles, improving risk capture. Strong Access, Matlab, Excel & VBA skills. |
£65,000 - £90,000 |
| Operational risk |
Salary |
Operational Risk Manager, Investment Banking
Graduate accountant with experience in audit and risk control in investment banking. |
£65,000 - £75,000 |
Senior Risk Manager, Retail Banking
Graduate accountant with banking audit and operational risk management experience. |
£60,000 - £80,000 |
Group Operational Risk Manager,
International Banking & Financial Services
Graduate with banking and risk management experience responsible for developing the operational risk profile of the overseas business units. |
£55,000 - £65,000 |
10+ years experience
Credit risk |
Salary |
Credit Director – Corporate Bank
Degree or ACIB qualified, clearer trained and holding a significant level of individual lending discretion and credit committee member. |
£80,000 - £90,000 |
Head of Credit Risk - Retail Bank
MSc qualified as a minimum, highly technical and often from a statistical background. No longer hands on, but likely to be from a scorecard development background. |
£80,000 - £110,000 |
Head of Portfolio Analytics
PhD in a quantitative subject. Significant experience in the area, including scorecard development. Comfortable managing a large team. |
£80,000 - £140,000 |
| Market risk |
Salary |
Head of Market Risk Control
Graduate with experience in market risk control in investment banking, including VaR analysis, stress testing, scenario analysis, market risk reporting and project work. |
£75,000 - £110,000 |
Head of Market Risk Management
MSc graduate in Maths or related discipline. Accomplished in all aspects of market risk and management including initiating and leading market risk projects. Ability to develop strong relationships with front office and relevant business heads. Investment banking background. |
£80,000 - £140,000 |
Head of Model Validation and Quantitative Analytics
PhD graduate in Maths or related discipline. Investment banking background with experience in both quantitative analytics and model validation. |
£85,000 - £160,000 |
| Operational risk |
Salary |
Head of Operational Risk Framework – Private Bank
Graduate with strong operational risk MI and reporting experience from the financial services sector. Previous management experience. |
£70,000 - £90,000 |
Global Head of Operational Risk – Investment Bank
Graduate and qualified CA with investment banking experience in operational risk and group internal audit. |
c. £125,000 |
Chief Risk Officer - Retail Banking
Economics graduate with central bank, merchant bank and retail banking experience in all disciplines of risk. |
c. £150,000 |
| Interim |
Salary |
| Interim Risk Framework Analyst |
£200 - £350 per day |
| Interim Risk Manager |
£450 - £550 per day |
| Interim Head of Risk |
£500+ per day |
Risk Consultant
(whereby the contractor is brought in for a specific specialism and the role may not fit neatly into the hierarchical structure of the team.) |
£400+ per day | |
|
|
