New York / September 30, 2005 – Total compensation and salaries increased modestly by an average of 5% in 2005 over the previous year for risk professionals at energy companies, according to a Professional Compensation Survey released today by Risk Talent Associates, a leading risk management executive search firm.
Michael Woodrow, President of Risk Talent Associates, states, “The market for risk management professionals at energy firms has settled down in the last year. Most of the post-Enron risk professionals have safely landed and equalized the talent pool. In some cases, we’ve seen firms such as Duke Energy eliminate their merchant trading units, thus reducing – but not eliminating – the need for sell-side like risk management talent at energy firms. In other cases, hedge funds and investment banks have beefed up their respective energy groups. So the market is very much in neutral for energy risk talent.”
“The large energy firms that remain active in the market are not paying top dollar for talent,” continues Woodrow. “There are fewer opportunities that pay attractive bonuses; when we look at the results of our surveys in energy and capital markets, energy risk managers earn significantly less than their counterparts at investment banks – sometimes by as much as 50%.”
The survey also reports that cash bonuses as a percentage of overall compensation are twice as high for senior and executive risk management positions (28-37%) than junior positions (14-16%) at energy firms. Furthermore, there is substantial difference in cash bonuses between the highest ranks at energy firms. Managing directors and chief risk officers average USD $107,000 in cash bonuses for 2005, almost $40,000 more than vice presidents and senior vice presidents.
Approximately 25% of respondents changed jobs within the previous two years, a rate that is consistent with previous compensation surveys by Risk Talent Associates in other industry segments. However, over three-quarters of those who changed jobs stayed within the energy industry. Woodrow states, “Energy is a little different from our analysis of asset management and capital markets, where risk managers tend to move between market segments. Because of the specialization of the supply component of energy trading, energy professionals tend to stay within their field, minimizing the compensation impact of similar positions in investment banking.”
This report is the last of four compensation surveys Risk Talent Associates has released this month, which include studies of consulting, technology and corporate risk managers. Risk Talent Associates has also released compensation surveys of risk professionals in the capital markets and asset management earlier this year.
About Risk Talent Associates
Risk Talent Associates (www.risktalent.com) is the leading international executive search firm focused exclusively on positions in the fields of market, credit and operational risk, as well as financial compliance and risk technology. Risk Talent’s expertise, industry knowledge, proprietary network and dedicated focus shorten the recruiting process to deliver senior and mid-level risk managers in the capital markets, asset management, energy, consulting and software industries. Risk Talent has offices in New York, Chicago, London, and Hong Kong.
Contact:
Daniel Keppie
Public Relations
Risk Talent Associates
613.323.3655
dkeppie@risktalent.com