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“We’ve hardly felt the financial crisis.”
Now there’s a sentence you don’t expect to hear these days. It comes from a headhunter for a temp agency in Germany, where apparently the financial sector is like Teflon: although German banks foresee some of the job cuts afflicting its peers – RBS among the most recent — there have been relatively few layoffs so far.
In a refreshing twist to a dire employment situation, headhunters in Germany are now scrambling to fill a slew of temporary banking jobs. Problem is, jittery bankers don’t want to switch firms in the middle of a crisis.
But it’s a different ballgame in London, where there the number people chasing jobs has doubled from last year in what one job expert calls “one of the most difficult periods in decades.” To top it off, the city once poised to replace New York as the financial center of the world is being blamed for the greed that sparked the financial crisis.
Back on Wall Street, Citibank is readying to slash another 10,000 jobs worldwide and trim its compensation budget as its shares skid.
On a bright note, some good news for women seeking a corner office in the finance sector: Japan’s Michiko Achilles recently became the first female director of Aozora Bank in what she calls a “new experience” for her male peers.
Job Bank – Nov. 7
The following financial services industry appointment was announced on November 7, linked where possible to personal profiles on Linkedin. To inform us of other job changes, please e-mail moves@thomsonreuters.com.
FRIENDS PROVIDENT PLC
The British life insurer named Evelyn Bourke, formerly CFO of Standard Life UK Financial Services, as its chief financial officer.
BANK OF AMERICA
The American bank hired Robert de Gidlow as a senior vice president in the company’s Global Liquidity Product and Solutions Consulting team.
The bright side of financial turmoil
Who says it’s all gloom and doom on Wall Street? Sure, job cuts are fast and furious these days, but the deepening financial crisis is bringing about some interesting unintended consquences. Time magazine reports that although the government bailout caps the salaries of top executives, it may actually prop up the bonuses of rank and file bankers.
True, those bonuses are substantially lower than they would’ve been had the markets not imploded in recent weeks — but not nearly as low as one might expect.
Compensation consultant Alan Johnson predicts the average managing director at an investment bank will be on the receiving end of a $625,000 bonus this year, with top bankers earning as much as $1 million. That may be a tough pill to swallow for the taxpayers footing the bailout bill, but some argue that bankers shouldn’t be penalized for their firm’s bad decisions.
Banks already recognize the importance of rewarding newly acquired talent. Bank of America last week offered retention packages to more than 15,000 Merill brokers in a bid to stave off defections. Only time will tell if it works.
Do Wall Street payouts need to be reined in? Share your thoughts below in the comments section.
Too easy to say, its ‘not right’ for bankers to get large bonus pay outs on the back of bail outs. It has to be relative to the individuals contribution in terms of revenue to bank. The banks have loaned money, that is what all companies do in tough times, the government reached out and held up the main banks because they were fearful of a total collapse and confidence panic in the market. If the money was not given in contract where it was stipulated there are constraints on bonus pay-outs to employees because we have loaned out the money then fine but it is not the case, therefore the banks are free to run their business as they see fit. Couple of points are to retain the best people in the market, one has to pay top bonuses. The money if not loaned then the government gets a stake at a rock bottom price which makes for an excellent investment correct? If so then when the share price rockets at whatever point in the future, then the government stand to make a healthy profit, makes perfect sense to me – there are no favours here, the governments will cash in at some point – not that the tax payer will benefit! Tough job making money for these guys, very bright, very sharp, top of their game and the bonus is relative to how much money they have made for the bank so why should they not get paid what they signed upto – because the government used tax payers money? One investment bank who is paying out excellent bonuses have already paid back the bail out money and made enough to pay its employees good bonuses. It is wrong in a sense, but wrong of the governement not to have managed it better rather than the banks for paying well. Tax payers should be compensated according to share price increase of the ‘investments’ (rather than bail-outs) that the government has made, let’s see some money flowing back into our pockets in terms of rate cuts and benefits to the public off the back of the hefty profits the governments of the world will make when things turn around.
More “slash and burn” to come?
Nerves are likely frayed at newly-acquired Merrill Lynch after analyst Richard Bove wrote a daunting note to clients warning of Bank of America’s “slash and burn” post-acquisition style, Bloomberg reports. A BofA spokesperson is mum on the size of the cuts, but Merrill CEO John Thain estimated in an earlier TV interview that cuts would be in the thousands. CNBC reported that about 500 sales and trading jobs across fixed-income and equity divisions have already been cut.
Meanwhile, some 4,000 National City employees are expected to get the axe as the Cleveland-based lender looks to shave costs over the next three years.
But it’s not bad news for everyone. Merrill’s head of strategy Peter Kraus is set to walk away with as much as $25 million, according to media reports. And three other senior Merrill executives — president and COO Greg Fleming, global sales and trading head Tom Montag, and global wealth management president Bob McCann — will take on new positions at Bank Of America.
Big isn’t always better for brokers
Beaten-down brokers are weighing the benefits of staying at Wall Street mammoths Morgan Stanley and Merrill Lynch in a time when even the big guys aren’t so safe anymore. Turns out, well-established firms are still attractive to many brokers even as some decide to break ties altogether to set up their own shop.
“Merrill advisors are looking at the prospect of working for Ken Lewis and Bank of America and fear they will find themselves in a cost-cutting mentality,” says Howard Diamond, CEO of Diamond Consultants, a New Jersey-based financial services recruiter.
But avoiding a job loss might be harder than simply switching firms. The U.N.’s International Labour Organization said on Monday that an estimated 20 million jobs will disappear by the end of next year as the financial crisis swirls. Think you’re next? Consult the Wall Street Journal’s handy “Five signs you may be on the layoff list” for more clues.
Job Bank – Sept. 24
The following are job changes within the financial industry for September 23, linked where possible to profiles on LinkedIn. To inform us of other job changes, please e-mail moves@thomsonreuters.com.
SOCIETE GENERALE CORPORATE & INVESTMENT BANKING The French bank has hired Kelly Broadhurst as a senior institutional sales person, to market equity derivatives to U.S. long-only asset managers. Broadhurst was previously at UBS in a similar role.
BANK OF AMERICA CORP The bank replaced Andrew Gissinger of Countrywide Financial Corp with one of its own long-serving executives, Craig Buffie. Click here for the full story.
ROYAL BANK OF CANADA The bank appointed Doug McGregor and Mark Standish as co-chief executives of RBC Capital Markets, effective Nov. 1. McGregor will be based in Toronto and Standish will be based in New York.
PIONEER INVESTMENTS Investment management firm Pioneer has hired Sylvain Ghisoni as head of distribution for the French, Belgian and Luxembourg markets. Ghisoni will be responsible for fund of funds, private banking, structured products and regional banking customers. He was previously senior relationship manager at Fortis Investments.
BBU BANK The community bank appointed Rafael Saldana as president and chief executive. Saldana was previously with R-G Crown Bank.
BofA’s big challenge seen keeping Merrill advisers
NEW YORK (Reuters) – Merrill’s “thundering herd” may be stampeding into the sunset.
That’s Bank of America Corp’s fear as it proceeds with the planned $50 billion purchase of Merrill Lynch and prepares to inherit Merrill’s 16,000 financial advisers, part of the retail brokerage that Bank of America Chief Executive Kenneth Lewis has described as the “crown jewel.”
The advisers may be tempted to strike out on their own or other firms could poach them. In either case, they could take a lot of their clients — and assets — with them.
“This is an industry where a lot of these brokers look at peers setting up their own businesses, breaking away,” notes Seamus McMahon, a financial services partner at management consulting firm Booz & Co.
Also, industry analysts fear a culture clash in the making between Merrill’s independent-minded, field-office broker and the large bank’s central command-and-control hierarchy.
The advisers expect to be courted. “Of course, our phones are ringing,” said a current Merrill adviser, who declined to be identified because he isn’t authorized to speak to the press.
Job Bank – Sep. 22
The following are job changes within the financial industry for September 22, linked where possible to profiles on LinkedIn.
NOMURA HOLDINGS The Japanese investment bank said James Lamb, Steven Ware, Kai Herbert, Sami Amara and Lofti Bensassi have joined its global foreign exchange sales and trading team in London. Herbert was previously from Bank of America, while the other four had worked at Bear Stearns.
GFI GROUP INC The inter-dealer broker added five new hires in emerging markets credit default swaps in New York. All five join GFI from BGC Partners.
DAVIS POLK & WARDWELL The law firm named former U.S. Securities and Exchange Commissioner Annette Nazareth a partner in its Washington, D.C. office. She will practice in the firm’s Financial Institutions Group.
RAINIER INVESTMENT MANAGEMENT INC The investment firm hired Michael Emery as senior equity portfolio manager and analyst. He previously was vice president and small-cap portfolio manager with Provident Investment Counsel.
BROADPOINT CAPITAL INC The broker-dealer subsidiary of Broadpoint Securities Group Inc named Clay Stephens as Managing Director and Roger Weilep as Vice President of Investment Grade Sales Department of Broadpoint’s Debt Capital Markets Division. Stephens was previously with Bear Stearns and Weilep was with Deutsche Bank Securities.
