The survey reports that in 2005, cash bonuses stayed at 33-35% of total compensation for senior positions such as Vice President, Managing Director and Chief Risk Officer, and 13-17% for junior to mid-level positions such as Associate, Manager and Director. While attractive, these figures are lower than those received by their counterparts at investment banks and asset management firms.
Jim Heneghan, Managing Director with Risk Talent Associates, states, âThe demand for risk professionals who understand energy - specifically oil and gas - is likely to increase in 2006 and 2007. Many major investment banks have refocused on the energy space, and more hedge funds are trading in the energy markets. One hedge fund recently warned investors of year-to-date losses that might exceed 35% due to a sharp drop in natural gas prices.â Heneghan summarizes, âAs long as there is instability in the markets, there will be healthy demand for risk professionals who understand oil and gas products.â
Approximately 22% of respondents reported recently changing jobs. While this rate is consistent with last yearâs energy survey, it is both lower than the job movement within asset management and higher than within the capital markets. Seventy per cent of those who changed jobs stayed within the energy industry, strengthening Risk Talent Associatesâ assessment that energy professionals tend to stay within their field with a higher degree of specialization than generalists in asset management and capital markets.
The survey also reports that the northeastern United States, Europe and Asia top the list in terms of best regional compensation. Medium-size risk organizations (20-50 risk professionals) report yielding higher compensation than both small and large risk organizations. Lastly, the survey demonstrates that those professionals who focus on enterprise risk at energy firms earn more than those who focus on credit risk, market risk and operational risk, in that order.
This is the third compensation survey Risk Talent Associates has released this year, including reports on capital markets and asset management. The company expects to quickly follow these results with studies of consulting, technology and corporate risk managers.