Comparative Analysis of Salaries in Investment Banking in Spain November 2009
CONTENTS: Comparative Analysis of Salaries in the Investment Banking Sector 1 2 Executive Summary Data 3 Conclusions 4 The Firm
CONTENTS: Comparative Analysis of Salaries in the Investment Banking Sector 1 2 Executive Summary Data 3 Conclusions 4 The Firm
1 Executive Summary OBJECTIVE (I) As in previous editions, this document intends to show the actual situation of Investment Banking in Spain by analyzing the salary ranges of various executive positions and making comparisons with the same data collected in 2008. For the purposes of the study, the principal international banks, Spanish banks, and M&A boutiques were analyzed. The collected data corresponds to the salaries of Managing Directors, Directors, Vice Presidents and Associates of these entities. We analyzed the fixed and variable salaries as well as the non-monetary benefits for each of these professional categories. 4
1 Executive Summary OBJECTIVE (II) Our study once again collects not only the comparative results of the monetary retribution, but also includes intangible elements of the nonmonetary retribution such as: Restaurant Tickets Car Leasing Pension Plans Stock Options Health Insurance Life Insurance Other (i.e. monthly gym membership, parking, social clubs, etc.) 5
1 Executive Summary OBJECTIVE (III) National and International Institutions based in Madrid Leveraged & Acquisition Finance (15 institutions) Approx. 5 professionals per institution Mergers & Acquisitions (22 institutions) Approx. 8 professional per institution 5 5 12 10 5 Banca Foreign Extranjera Banks Banca National Nacional Banks Foreign Banca Extranjera Banks National Banca Nacional Banks Boutiques 6
1 Executive Summary - Professional Categories For the purposes of this study we have standardized the terminology used for the various professional categories across the various institutions analyzed: Leveraged Finance/ M & A SECTOR CATEGORIES Managing Director Executive Director Director Senior Manager Vice President Associate Director Sub-director Manager Associate Analyst STUDY CATEGORIES Managing Director Director Vice President Associate 7
CONTENTS: Comparative Analysis of Salaries in the Investment Banking Sector 1 2 Executive Summary Data 3 Conclusions 4 The Firm
2 Data Salary Structure for Leveraged & Acquisition Finance FIXED VARIABLE TOTAL Minimum Average Maximum Minimum Average Maximum Total Average Associate 35.000 52.000 95.000 14.000 26.000 72.000 78.000 Vice President 50. 000 84.000 120.000 20.000 56.000 101.000 140.000 Director 65.000 109.000 140.000 30.000 70.000 120.000 179.000 Managing Director 100.000 183.000 300.000 100.000 192.000 288.000 375.000 9
2 Data Miles Miles 300 250 200 150 100 50 Inter-annual Comparative Fixed Income Fijo Fixed 2008 2008 Fijo Fixed 2009 2009-8.8% 57 52-17.8% 102 84-27.3% - 26.8% 300 250 250 183 200 150 150 109 100 50 Salary Structure for Leveraged & Acquisition Finance Inter-annual Comparative Variable Income Var 2008 Var 2009-3.7% 27 26-44% 100 56-49.7% 139 70-23.2% 250 192 0 Asociado Vice President Director Managing Director Miles 600 500 400 300 200 100 Inter-annual Comparative (Fixed + Variable) Total 2008 Total 2009-7.1% 84 78-30.7% 202 140 0-38.1% 289 Asociado Vice President Director Managing Director 179 500-25% 375 0 Asociado Vice President Director Managing Director 10
2 Data Salary Structure for Mergers & Acquisitions FIXED VARIABLE TOTAL Minimum Average Maximum Minimum Average Maximum Total Average Associate 34.000 60.000 83.000 13.000 49.000 124.000 109.000 Vice President 80. 000 111.000 140.000 20.000 139.000 300.000 250.000 Director 110.000 154.000 250.000 110.000 205.000 300.000 359.000 Managing Director 205.000 235.000 275.000 250.000 383.000 500.000 618.000 11
2 Data Miles 300 250 200 150 100 50 Inter-annual Comparative Fixed Income Fijo Fixed 2008 2008 Fijo 2009 Fixed 2009-6.2% 64 60 2.8% 108 111-14.4% 180 154 275-14.5% 235 Miles 600 500 400 300 200 100 Salary Structure for Mergers & Acquisition Inter-annual Comparative Variable Income Var 2008 550 Var 2009-16.9% 59 49 29.9% 139 107-2.4% 210 205-30.3% 383 0 Asociado Vice President Director Managing Director 0 Asociado Vice President Director Managing Director Miles 900 800 700 600 500 400 300 200 100 0 Inter-annual Comparative (Fixed + Variable) Total 2008 Total 2009-11.4% 123 109 16.3% 215 250-7.9% 390 359 825 618 Asociado Vice President Director Managing Director - 25.1% 12
2 Data - Leveraged & Acquisition Finance vs. M&A Inter-annual Comparative (Fixed + Variable) L&AF Inter-annual Comparative (Fixed + Variable) M&A Miles 600 500 400 300 200 100 0 Total 2008 Total 2009-7.1% 84 78-30.7% 202 140-38.1% 289 179-25% 500 375 Asociado Vice President Director Managing Director Miles 900 800 700 600 500 400 300 200 100 0 Total 2008 Total 2009-11.4% 123 109 16.3% 215 250-7.9% 390 359-25.1% 825 618 Asociado Vice President Director Managing Director If we compare total remuneration for L&AF and for M&A we can observe that the decrease in total salary has been much more significant percentually in the case of VPs and Directors in L&AF than for their counterparts in M&A. In the case of Associates, the decrease was more pronounced in M&A, fundamentally due to the disproportionate growth in salary that this professional category had experienced in previous years. Lastly, in the case of Managing Directors, the correction was equally proportionate in both subsectors. 13
2 Data Other characteristics of remuneration policies in the form of non-monetary benefits are: LIFE INSURANCE HEALTH INSURANCE MEAL VOUCHERS PENSION PLANS COMPANY CAR OTHERS* Associate 62% 83% 65% 63% 10% 67% Vice President 60% 83% 81% 52% 14% 76% Director 52% 82% 56% 59% 33% 75% Managing Director 78% 100% 44% 67% 22% 100% *Others: Gym membership, car leasing, parking, stock options, cell phone, laptop, daycare vouchers, accident insurance, store discounts, corporate credit card, etc. 14
CONTENTS: Comparative Analysis of Salaries in the Investment Banking Sector 1 2 Executive Summary Data 3 Conclusions 4 The Firm
3 Conclusions The point of departure for this edition of the study is quite different than that of previous years as the universe analyzed is the same (national and international banks and specialized boutiques), but the particular situation of each individual entity varies greatly: Some Investment banks that were important players in the sector no longer exists (for example Lehman Brothers), and their professionals have been incorporated into other Banks, the Big Four, Boutiques, large corporations and entrepreneurial projects. Many of the principal players (especially the large international banks) have slimmed down their Investment Banking departments (most notably in L&AF), letting those professionals with the highest salary levels go. With only these two points in mind, one can already explain the decrease in fixed income of M&A and L&AF professionals. 16
3 Conclusions Since the end of 2007, financial markets across the world have suffered a financial strangulation provoking enormous difficulties in obtaining financing. Since a there is less financing available, the deals managed by Leveraged Finance has diminished considerably in comparison to previous years. This situation has provoked important adjustments in bonuses (the part of salary linked to objectives) of the professionals that work in the sector. The M&A market has also been affected, being fewer possibilities for ready financing, the number of acquisitions and sales operations has decreased, especially when one keeps in mind the past few years during which the market experienced spectacular levels of growth. Lastly, we must note that the bonuses reflected in this study were not included in the averages calculated for those entities that have yet to pay bonuses for this year. 17
CONTENTS: Comparative Analysis of Salaries in the Investment Banking Sector 1 2 Executive Summary Data 3 Conclusions 4 The Firm
4 The Firm is the second oldest firm in the profession and is one of the most prestigious executive search firms in the world. As one of the founders of AESC (The Association of Executive Search Consultants), it assisted in developing the Ethical and Professional Codes for the sector, still conscientiously maintained in the firm to this day. Signium has a network of 45 offices, strategically distributed in 29 countries with more than a 150 highqualified consultants. Although the technical resources and quality standards are the same for each of our offices, the Signium Board constitutes partners from each region, thus representing the diversity and global nature of the firm. It is our partners who are responsible for managing strategy, communications and teams throughout the organization. In this manner, we achieve constant quality standards and methodology. In the Iberian market, Signium International is represented by Bao & Partners with three offices: Madrid, Barcelona and Lisbon. Our team of 30 people has more than 450 cumulative years of experience, more than 150 of which are in Executive Search. Ignacio Bao is currently Worldwide Chairman of Signium International
4 The Firm - Global Offices NORTH AMERICA Canada Toronto USA Atlanta Austin Charlotte Chicago Cleveland Miami Philadelphia Tampa LATIN AMERICA Brazil Sao Paolo Colombia Bogota Mexico Mexico City Panama Panama Venezuela Caracas EUROPE Austria Vienna Denmark Copenhagen Finland Helsinki Turku France Paris Germany Dusseldorf (2) Munich Holland Amsterdam Ireland Dublin Italy Milan Poland Wroclaw Portugal Lisbon Spain Madrid Barcelona Sweden Gothenburg Malmoe Stockholm Switzerland Zurich UK London MIDDLE EAST UAE Dubai Saudi Arabia Jeddah ASIA India Mumbai Japan Tokyo Malaysia Kuala Lumpur Singapore Singapore PACIFIC Australia Melbourne Perth Sydney New Zealand Auckland Wellington AMERICAS (14 Offices) EUROPE - MIDDLE EAST (22 Offices) ASIA - PACIFIC (9 Offices)
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