New York / October 24, 2007 – Energy risk professionals enjoyed a banner year in 2006 in terms of compensation, earning an average of 14% more than 2005 levels, according to the latest annual Professional Compensation Survey by Risk Talent Associates, a leading risk management executive search firm. This is significant considering that compensation for these same risk managers increased only 5% in 2005 over 2004. Salaries increased an average of 8% and bonuses experienced double-digit growth across most job titles in 2006.
One reason for this robust growth is the overall boom in energy demand and the increased trading in financial markets around the globe. Investment banks and hedge funds expanding into energy supply and trading put additional upward pressure on compensation. Michael Woodrow, founder and President of Risk Talent Associates states, “Banks and hedge funds understand that the value of managing risk can be amplified in the energy field, particularly in light of some of the major swings in commodities prices. These organizations have built and are continuing to expand sophisticated commodity trading groups. Most are smart enough to invest in supporting their energy traders with highly capable risk organizations.”
Risk Talent Associates predicts strong growth in the energy sector for risk managers. Over half of those surveyed expect their risk groups to increase in number. Approximately 28% of survey respondents reported changing jobs within the last two years, while slightly less (24%) expect to change jobs in the next two years. “This may indicate it will be tougher to recruit energy risk professionals in the upcoming year, especially as demand for their skills widens through the banking community,” cautions Woodrow. The survey reports that in the past year, nearly two-thirds of respondents who reported changing jobs, came from other energy jobs. Woodrow notes there may be increased mobility in and out of the energy sector in the future.
Other significant findings in the survey include that total compensation is highest regionally in the northeastern United States, highest in organizations with more than 50 risk professionals, and highest for professionals who focus on enterprise risk over those who focus on credit risk or market risk exclusively.
The energy compensation survey is the latest in a series of reports across numerous industry sectors, including capital markets, asset management and software/technology. Risk Talent Associates expects to release their annual updates for risk managers in consulting, compliance and corporate sectors before the end of the 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.
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