The 20 Rising Stars of Fixed Income 2008

Another Disappointing Year for Comp Fixed-income salaries should remain steady, but bonuses are likely to drop further By Jon Jacobs, Staff Writer, eFinancialCareers.com Debt capital markets and investment-grade bond sales and trading also are under pressure. According to Alan Johnson, managing director of Johnson Associates, a compensation consulting firm in New York, a vice president of corporate finance who made $550,000 last year might earn between $450,000 and $475,000 this year. Jumping to a new employer - a standard pay-boosting tactic during the bull market - is now far from a slam dunk. "If you can move, you're probably not going to get the kind of package you could in the past," said Ken Murray, president of New York recruiting firm Mercury Partners. Indeed, candidates aiming to switch from a bank to a hedge fund need to be flexible on and around guarantees, advised Craig Stocksleger, who focuses on fixed income at Comprehensive Recruiting in Tempe, Ariz. For the most part, first-year pay guarantees are going to candidates with profitable trading records. While that's partly because employers are less prone to guarantee compensation for first-half hires - who haven't accrued most of this year's bonus in their current job - it also reflects the downturn in the fixed-income markets and the employment situation. Bright spots can be found in distressed securities, risk management and flow trading for Treasuries, agencies and interest-rate products. Also, the buy side's outlook is healthier than that of the sell side. But even in relatively promising niches, pay is rarely climbing. State of the Market Indeed, the shaky condition of the markets and banks’ balance sheets have made employers less inclined to pay up for talent. And why should they? These days there's a glut of fixed-income downsizing victims seeking new employment. "It's a buyer's market," observed Michael Karp, chief executive of Options Group, a New York-based executive search and strategic consulting firm. "There are a lot of people out there looking." "The hiring activity level, particularly from the sell side of the Street, is way down," added Jim Geiger of Analytic Recruiting, another New York search firm. "The hiring needs have been substantially reduced, and the number of people looking for a job has increased." MAY 2008 F OR FIXED-INCOME PROFESSIONALS asking if compensation will recover from last year's bloodbath, the answer is: Don't hold your breath. Headhunters and compensation consultants expect bonus pools for fixed-income specialists at investment banks to shrink about 20% by the end of this year. That comes on top of a 30% drop last year. In structured mortgage and structured credit - where 2007 bonuses fell more than 50% and roughly half of last year's jobs have vanished - those still working can expect payouts to be flat. 8 FIXED INCOME RISING STARS http://www.eFinancialCareers.com

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