Investment Dealers' Digest -
The insider's guide to
investment banking and capital markets
f 2005 was a year for investment bankers to build Wall Street
their nest eggs, 2006 was the year they could start
spending indiscriminately. Thanks to record profits bankers
at the major banks -totaling some $90 billion last
year, a 38% annual jump, according to the Boston enjoyed a
Consulting Group -
bankers saw their compensa-
tion climb as much as 20%, on average, in 2006. And so
far, 2007 looks like it may eke out another increase, ac- Can 2007
cording to some compensation sages, as inGestment banks
are again expected to increase their profits. (Boston Con- compensation
sulting predicts another 9% to 15% improvement.) And
despite cautionary signs, such as worries about subprime
top last year?
mortgages, hiring remains frenzied and competition for
top bankers has become only more intense.
"Sitting here today, it is too early to talk about the
yearend, but all indications are that 2007 is going to be an-
other strong year," says John Rogan, global head of the
fmancial services practice at search fm Russell Reynolds."
Intuitively, people think there has to be a slowdown or
downturn, but I can't get anyone to tell me why."
"We have been unbelievably busy," adds Laura Lofaro,
managing partner at search firm Sterling Resources.
"Hiring has been extremely competitive. Everybody is
looking for top producers in the same sectors."
Banks have been chasing rainmakers in energy, real es-
tate and retail, not to mention bankers with connections to
the private equity marketplace. But it's not just the sea-
soned pros attracting suitors. At the junior level, the banks
By Avital Louria
APRIL 2,2007 IDD 15
have been actively pursuing new recruits to get enough pro-
cessing manpower to chum the deal machine, and third-
and fourth-year associates have also seen their pay rise sub-
stantially during the past couple of years. While junior