New York / March 29, 2007 – Risk professionals in the capital markets saw their average total compensation increase by 9% in 2006 over 2005, with an 8% compound average growth rate (CAGR) since 2003. While growth in salary has been a more modest 4% over the last four years, double-digit growth in cash and non-cash bonuses has resulted in extremely healthy total compensation. The figures were reported in a new Professional Compensation Survey by Risk Talent Associates, a leading risk management executive search firm.
In addition to compensation, this year’s survey features trends in hiring for risk organizations. Seventy-two per cent of survey respondents report they are considering changing jobs in the next two years – 27% say they will change jobs, and 45% say they may change jobs. This is dramatically higher than the 17% who report having changed jobs in the last two years. Michael Woodrow, President of Risk Talent Associates, explains, “Increased emphasis on risk management by firms, regulators, media and investors is causing experienced risk professionals to look externally in order to ensure that their current compensation reflects their market value.”
Risk Talent Associates also notes that 40% of participants expect their risk management teams to add staff in the coming year. Woodrow adds, “Firms continue to face challenges hiring mid- and senior-level risk professionals due to the expanded focus on risk, and the specialized skill sets required. The most successful firms utilize a variety of recruiting sources including retained search, contingency search, job boards, and employee referral.” Sixty-one per cent of respondents use more than one source to find people when filling additional risk management positions. Trends vary by type of financial institution, with investment banks far more likely to utilize pricier options like retained search firms, and government sponsored entities more likely to use job boards.
Approximately 500 risk professionals from the capital markets worldwide participated in the survey, with heavy representation from commercial and investment banking. Compensation amongst risk management positions in investment banking are higher than the average for capital markets, and rise at a much steeper rate with increased seniority. The survey also demonstrates that enterprise risk professionals receive higher total compensation than those focused exclusively on market, credit or operational risk.
Risk Talent Associates will publish compensation surveys in 2007 on asset management (including hedge funds), financial compliance, energy, consulting, software and corporate risk.
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