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Top bankers wooed with GBP1/2m'hellos'
(Evening Standard Via Thomson Dialog NewsEdge) CITY firms are paying top bankers "golden hellos" of up to GBP500,000 to poach them from their rivals in the scramble to snap up the best operators.
The bumper profits being made by the big banks in the last quarter have created huge demand for the top staff. That leaves them forced to pay huge incentives if they want to hire good people.
Recruitment consultants Joslin Rowe said the average enticement payment in April, May and June was a huge GBP150,000 among the 5% of headhunted people who received them.
Recruitment company Michael Page said that in some cases staff are also being offered the equivalent of the next three years' worth of bonuses from their existing employers to lure them away. It added that these payouts are known as bonus buyouts, rather than golden hellos.
The number of new jobs in the financial services sector topped 70,400 in the second quarter of the year, up 24% on the same period last year.
Tara Ricks, managing director of Joslin Rowe, said: "With 70,000 vacancies in the second quarter alone, recruiters are crying out for good candidates, but the smaller pool of high-flyers are locked into their jobs until bonus time unless their prospective employer is prepared to open his cheque book.
"Normally bonus buyouts only start to be offered much later in the year, but the sheer demand for staff means we have been seeing this since May."
The recruitment firm said that the joining bonuses indicated that City firms had shrugged off the recent market volatility and were pushing ahead with their recruitment plans.
Ricks said: "City firms are hiring enthusiastically and we have just had one of our busiest months on record."
In June, more than half of City workers surveyed by Joslin Rowe had said they expected that share price dips would affect their annual bonuses.Michael Page said that, in some cases, the hiring firms were buying out next year's bonuses on top of this year's. In a few instances, they were stretching to three years' worth.
Mark Pettman, Michael Page City director of corporate and structured finance, said: "This is one of the years that is looking better for buyouts, like 2000, which was a good year."
He predicted that annual bonuses would be up on the back of high transaction volumes.
Wall Street bonuses are expected to jump 15% this year, with investment bankers and equities traders reaping the rewards of rising stock markets and record mergers and stock market flotations.
Consultant Johnson Associates estimated that bonuses for bankers at companies such as Goldman Sachs, Citigroup and JPMorgan Chase - the year's top three mergers advisers - would probably rise 25%. It said equity traders were in line to pocket a gain of between 20% and 25%.
Copyright 2006 Evening Standard. Source: Financial Times Information Limited - Europe Intelligence Wire.
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