It’s become a cliche to say that risk managers in investment banks are hot. However, cliches are invariably grounded in reality and in the case of risk managers their hotness is driving their pay ever-higher.
New research by pay benchmarking site Emolument suggests that risk salaries grew by an average of 4.5% a year in each of the past two years. Even more impressively, bonuses grew by 33% a year over the same period.
Risk managers have scarcity to thank for their increasing value. What was once a bureaucratic nicety has been transformed into an absolute necessity by increased regulation and big fines for transgressions. Thomas Drewery, CEO of Emolument, says the big increase in risk bonuses is a reflection of the fact that risk managers can now, “name their terms.”
When salary and bonus are taken into consideration, Emolument says the average risk manager in an investment bank in London is now earning £110k ($167k), up from £93k in 2012.
Some risk managers may be earning far more – even with just five years’ experience. We’ve looked at risk salary surveys for the City of London, Wall Street and Hong Kong and derived the league table below. The figures are drawn from the salary surveys of recruitment firms Robert Walters, Morgan McKinley and Kennedy Pierce. They don’t include bonuses, which according to are around 30% of salaries. Risk isn’t the best-paid area in banking, but it doesn’t pay too badly either – especially if you’re in New York City.
=1. Market risk associate, New York. $175k (£115k), from Robert Walters
=1. Credit risk associate, New York. $175k (£115k), from Robert Walters
=1. Quant risk associate, New York, $175k (£115k), from Robert Walters
2. Investment banking risk manager, Zurich, CHF110k ($122k), from Robert Walters
3. Quant risk analysis, London, £75k, ($114k) from Morgan McKinley
4. Portfolio risk manager, London £70k ($106k) from Kennedy Pierce
5. Market risk associate, Hong Kong, 660k HK$ ($85k)
