New York / October 23, 2006 – Risk professionals in software and technology experienced a 7% average increase in total compensation in 2005 over 2004, according to a Professional Compensation Survey released today by Risk Talent Associates, a leading risk management executive search firm. Growth in salary increased modestly at an average of 3%, while growth in bonuses was a more robust 11%. Those with 7-15 years of experience saw their bonuses grow the most at 17%, compared to 10% for those with 0-6 years of experience, and 6% for those with over 16 years of experience.
Bonuses (including cash and non-cash bonuses) for most senior executives, were two-thirds of total compensation for Managing Directors and Chief Risk Officers, and over 70% for Partners and Presidents at risk technology and software firms. Total compensation for Partners and Presidents topped the $1 million mark. When looking at tenure, those with 0-6, 7-15, and 16 or more years of working experience reported bonuses as 38%, 50%, and 62% of their total compensation, respectively.
Michael Woodrow, President of Risk Talent Associates, stated, “Technologists who focus on risk management continue to be highly valued at investment banks, asset managers, and at the risk system vendors. We have seen increased activity by firms looking for specialists in risk technology. In particular, firms seek individuals who understand trading and financial instruments, risk management, have some degree of quantitative expertise, and possess current technology skills in C++ or Java.”
Woodrow continued, “Those technologists who have taken the time and effort to complete a masters in financial engineering, the PRM or FRM exams, have the skills that firms desire. We don’t see this slowing down because as risk management and risk culture goes mainstream, the greater the need will be for technology groups to incorporate these models into the decision-making tools used by the business units.”
Twenty-five percent of the survey participants reported changing jobs within the previous two years, which is consistent with data compiled in other surveys by Risk Talent Associates for different markets. Those who changed jobs in software and technology came from either competing software and technology houses (40%), or other industries such as commercial and investment banking industries (60%).
The survey also found that New York-based professionals earn the highest compensation globally and professionals specializing in enterprise risk management command higher compensation than those focusing on particular risk types such as credit and market risk.
This report is part of a series of annual compensation surveys released by Risk Talent Associates this year including capital markets, asset management and energy.
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.
Risk Talent Associates