Remuneration: Brazilian bucks leave globals gasping
Global investment banks under domestic pressure to curb salaries and bonuses face a dilemma in booming Brazil: how to compete for skilled staff in a market where local competitors face no such constraints. Chloe Hayward reports.
BANKERS’ PAY IS a sensitive issue; never more so than now. As US investment banks finalize their executives’ bonus packages, the financial world and ordinary taxpayers wait for those who receive extraordinary amounts to be vilified in the media once again. When the Swedish prime minister, Fredrik Reinfeld, announced at the end of the G20 meetings that "the bonus bubble burst tonight" he clearly didn’t have Brazil in mind.
Last year some senior Brazilian investment bankers took home twice as much as their New York counterparts. Brazilian base salaries and bonuses are often superior to those in the US. In 2009, this disparity will most likely increase and spread to the lower rungs of the banking ladder. Already the average vice-president in Brazil takes home $16,700 a month, at a roughly comparable level a NYC analyst collects $15,000. In 2008, cash bonuses dropped 44% for New York bankers but by just 30% in Brazil.
This pay disparity is a worry for foreign banks with Brazilian operations.