Latin Finance - September/October 2010 - 28

compensation survey

The merger of Itaú and Unibanco and Santander and ABN AMRO means there are two retail giants focused on providing credit to the middle class, but others are expected to try to get in.

Smaller Bonus

One LatAm recruiter, who asks not to be identified, describes bankers in Brazil as mercenary. The headhunter says bankers’ focus is on making the maximum amount of cash, with thoughts of long-term career progression falling by the wayside. Guarantees are also making a comeback, with one-year terms becoming widespread, and up to two years for senior hires, according to recruiters. These could go up to three years at banks that are just starting to build out their platforms, they add.

Title inflation could also make a comeback in a bid to attract talent. “We could see offers to move from a VP1 to a VP2 level as was sometimes the case before the crisis. This is a sweet incentive, particularly for junior level position,” says the headhunter. Recruiters also say structures are changing. They say the proportion of deferred bonuses is increasing significantly, as is the time they are deferred for. “The stock part of bonuses is being deferred for two to three years, a culture recently adopted by Brazilian banks that aligns them with foreign banks’ global policies for compensation,” says Bolotnicki. The proportion of bonuses paid in stock is still lower in Brazil than in the US and

Asia, where Bolotnicki says there is still much more of a culture of stock options. While in New York it is the norm that stock makes up 50%, and in some cases up to 70%, of bonuses at MD or CEO level, this is unheard of in Brazil or the rest of LatAm. Local banks are also more reluctant than foreign banks to increase stock options. “Cash is king in Brazil and with local banks looking to attract players, stocks make up no more than 20% of bonuses, which compares to 30%-40% paid by foreign banks,” says Bolotnicki, who adds that such levels are in line with last year’s figures. Bonuses also now make up a smaller proportion of a package. Base salaries relative to bonuses are around 40% to 45%, whereas before they would only make up around 30% of a package.

Brazil M&A Compensation ($1,000s)
Raises all round Base Low Analyst 1st Year 2nd Year 3rd Year 1st Year 2nd Year 3rd Year 55 65 85 90 120 150 180 250 350 High 65 85 100 120 150 175 200 300 450 Low 40 60 70 80 90 100 150 300 500 Bonus High 50 70 80 90 110 120 220 500 800 Total Compensation Low 95 115 135 155 185 225 325 500 750 High 115 135 155 180 215 260 400 700 1,200 2010 vs 2009 % Change Low +27 +28 +23 +29 +28 +18 +18 +11 +15 High +21 +23 +29 +29 +30 +24 +23 +27 +26

Associate

VP Director MD
Source: Options Group

Brazil ECM Compensation ($1,000s)
Slower growth Base Low Analyst 1st Year 2nd Year 3rd Year 1st Year 2nd Year 3rd Year 55 65 85 90 120 150 180 250 350 High 65 85 100 120 150 175 200 300 450 Low 30 40 50 60 70 90 150 350 600 Bonus High 40 50 60 70 90 110 200 500 750 Total Compensation Low 85 105 135 150 190 240 350 600 950 High 105 135 160 190 240 285 450 800 1,300 2010 vs 2009 % Change Low +6 +5 +8 +11 +12 +12 0 +9 +0 High +5 +13 +19 +19 +26 +24 0 +14 +4

Associate

VP Director MD
Source: Options Group

28 LatinFinance

September/October 2010
Latin Finance - September/October 2010

Table of Contents for the Digital Edition of Latin Finance - September/October 2010
