A shortage of
talent combined with rivalry among banks
to expand or rebuild operations across the fast-growing region has sent
compensation levels for some bankers soaring to levels last seen before
the financial turmoil, according to headhunters and bankers.
Banking chiefs said that, unlike
in the US and Europe, where a public backlash forced banks to keep a
lid on pay, the war for talent in Asia prompted many institutions to
make lucrative offers to star recruits.
In the aftermath of the
crisis, most banks pledged to reduce pay for staff around the world, tie
compensation to long-term results and end controversial practices such
as guaranteed sign-on bonuses.
Citigroup,
Bank of America Merrill Lynch and UBS,
which each received substantial state support during the crisis, are
among those seeking to build their staff bases in Asia.
Industry
participants said it was becoming common for senior bankers in niche
areas to be offered multimillion-dollar deals, including the return of
controversial “guaranteed bonuses” for one or two years.
The
return of such packages and bonuses could spark furore among politicians
and regulators in the US and Europe.
“Compensation for top
bankers in Asia is generally approaching 2007 levels and in some cases
is exceeding it,” said Philip Clayton of Clayton Asia, a search firm.
Bank
of America and Citi have announced several high-profile recruits of
late. Banks less badly affected by the crisis, including Standard
Chartered, Barclays, Deutsche
Bank and Nomura,
are also fuelling competition
for bankers with targeted hiring plans.
Some offers are being
structured to guarantee large salary increases in the first year, with a
“spoken” commitment in the second year, according to bank chiefs
familiar with the matter.
“I am seeing astonishing salary offers
made by banks crippled by the financial crisis,” said one regional chief
of a top-tier investment bank.
Hiring banks say they have no
option but to pay competitive salaries to attract staff to take
advantage of growth opportunities in lucrative markets such as China and
Australia, whose economies sailed through the downturn. Headhunters
said regional specialists who cover sectors such as financial
institutions or resources were in highest demand.
Industry participants said bankers with a proven ability to
generate revenue in China were sought-after, with salary packages of
$10m not uncommon.
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