Friday, May 21, 1999 Published at 16:24 GMT 17:24 UK
Business: The Economy
Traders cry into their champagne
Stressful work, but the rewards can still be excellent
There might be little sympathy from the wider public, but some dealers in the City of London have seen their pay packages fall by up to 6% over the past year.
Salaries have risen, but the severe turbulence in financial markets around the world has hit bonuses, says the latest report from consulting firm Monks Partnerships.
However, six-figure salaries are still common, with some fund managers taking home more than #300,000.
''The bonuses are better than we had anticipated given that bank results were not as good as might have been expected following the turmoil in the emerging markets,'' he said.
"The fact that there are some guaranteed bonuses floating around may have something to do with it."
Pay under scrutiny
There are still those in the City who can look forward to a bonus no matter how their company performs.
This, though, is coming under scrutiny from the UK Government. It is not against big pay packets as long as they are justified.
A firm of accountants has been appointed to investigate the relationship between executive pay and company performance, and to see if shareholders are able to effectively challenge excessive pay packages.
The City has been reading the signs, and many firms now give bonuses only when they are deserved or when there is the money.
As a result, among those worst hit last year were people specialising in high-yield markets, who saw their total pay fall by 6%, even though their salaries went up. And bond traders saw a drop of 4.3%.
Rosier for risk managers
But, as in every financial movement, there were winners and losers. Sizeable bonuses for fund managers brought them an average increase of 26.7%.
And the collapse of the Russian economy and foreign exchange volatility helped those working in risk management to pull in average pay hikes of 16.9%, rising to 18.4% when bonuses were included.
Of course, everything is relative, and the salary fluctuations of City workers are unlikely to worry those struggling on wages below the UK average of #16,000 a year. The survey shows there is still plenty of money to be made making money:
From the boom days of the City of London in the 1980s, traders have been noted for their big money and work hard, play hard attitude.
But the consolidation in the banking sector in the late 1990s has brought the spectre of redundancy into the dealing rooms. While traders are still more than happy to spend their money, they exercise a little more discretion than their 1980s counterparts.
There are still pockets of showboating. One group of traders at Credit Suisse First Boston were nicknamed the Flaming Ferraris, after their favourite #13-a-time cocktails. In 1998, 16 of them shared a bonus of #5m.
But shortly afterwards, three of the team were sacked for allegedly trying to manipulate share prices. Their bonuses were withheld.
The money might be handsome, but the risks can be high. A wrong decision can not only lose your clients and employer money - it can cost you your job and, in extreme cases such as Nick Leeson's, your freedom.
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