Latin Finance - September/October 2010 - 32

compensation survey
draw. The bank recently hired as partners Claudio Galeazzi, a restructuring expert who was chief executive of Pão de Açúcar, and Roberto Martins de Souza, former CFO of Lojas Americanas, to work in the private equity and merchant banking unit. Itaú, with its revenue sharing scheme, is also becoming increasingly attractive. The Brazilian bank wants to expand to the rest of LatAm. It is looking to appoint an equity research analyst for Brazilian stocks in Mexico, though hiring for the position is proving difficult. A lack of talent there as well as bankers not wanting to move because of security concerns means the new hire may instead be based in Chile, say recruiters. “Being at the ground level of growth opportunities makes [Itaú] attractive for bankers looking to move banks,” says a headhunter who asks not to be identified. Compensation from the investment bank arms of Brazilian banks is also very competitive relative to international banks, adds the source. Another trend is the increasing ability of commercial banks to compete with investment banks for talent. “Before the crisis people only wanted to work at Lehman, Goldman Sachs, Morgan Stanley and Merrill Lynch and would not have been interested in an HSBC,” says one recruiter. “Before they were not seen as very exciting or aggressive. Now people are very interested in working for them as they have stability and are growing, helped by their cheap funding from retail clients.” bull market for talent – do not expect the spree to slow. They predict that in the next five years there will be a squeeze on talent with experience in private equity, project finance and credit. “Upcoming business and pay will definitely be strong in private equity, especially as a lot of those that work on the deal end up having an equity portion of the revenues,” says Bolotnicki. “Private equity has grown very quickly, People are investing a lot in the future, and it is all to do with credit,” he adds. And the way compensation works in the private equity market reflects a long-term compensation model, based on the success of investment decisions. With bonuses often linked to a business model, the nature of private equity investment means bankers will receive carried interest when a firm is sold. “It takes at least five years to see cash flows in private equity or infrastructure,” says Bolotnicki. While the hiring across Latin America shows no signs of slowing, compensation is expected to rise at more sustainable levels than pre-crisis. “There will not be the same frenzy in Brazil to hire at any cost, as was seen between 2005 and 2007. Banks will be more thoughtful when it comes to how to compensate going forward,” says Bolotnicki. LF

The “Brazil MBA”

As the 2014 World Cup and the 2016 Olympics approach, alongside retail and real estate booms, it is not the just banks but also the bankers that have a renewed interest in Brazil. There is a marked trend, not only of Brazilians looking to return, but also of financiers from Europe and the US looking to make the leap. Bolotnicki says he has to manage the expectations of those hoping to parachute into a fee bonanza. “I need to remind them that São Paolo is not Hong Kong, where you can arrive and get to work as if it was the US or Europe,” he adds. Bolotnicki bluntly tells bankers that they will need what he likes to call “a Brazilian MBA,” where at least a conversational level of Portuguese, knowledge of how the markets work and an understanding of the culture are needed before a banker can expect to start work. Recruiters – who stand to gain substantial commissions from a continued

Brazil Sales and Trading Compensation ($1,000s)
Big boost at senior level Total Annualized Returns (%) Base Low Associate VP Director MD
Source: Options Group

Bonus High 150 160 220 450 Low 120 230 600 1,000 High 160 600 1,200 2,500

Total Compensation Low 240 380 780 1,300 High 310 760 1,420 2,950

2010 vs 2009 % Change Low +20 +17 +20 +18 High +27 +32 +54 +60

120 150 180 300

Brazil Equity Research Compensation ($1,000s)
Largest year-on-year raises Base Low Analyst Associate VP Head of Research
Source: Options Group

Bonus High 100 160 200 500 Low 100 200 400 800 High 150 250 600 1,500

Total Compensation Low 175 320 580 1,100 High 250 410 800 2,000

2010 vs 2009 % Change Low +75 +88 +66 +29 High +85 +91 +88 +82

75 120 180 300

32 LatinFinance

September/October 2010
Latin Finance - September/October 2010

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