After more than three years of pink slips and downsizing, Wall Street is making a comeback with a strong pay year, according to a new report by an executive search firm, Options Group.
Total compensation is expected to increase for many financial-services professionals, especially equities traders, who have experienced a volatile market for the last several years, Michael Karp, Options Group’s chief executive, told International Business Times of the firm’s mid-year report.
Equities traders can expect a 14 percent rise in compensation from last year, compared to a 7 percent jump for investment bankers, a 15 percent bump for private wealth managers, a 5 percent increase for risk managers and a 6 percent climb for fixed-income and commodities traders.
But part of that increase is thanks to massive layoffs in the equities trading market since its peak about seven years ago.
“The all-time [high in headcount] of 2006 is 30 to 40 percent less today,” Karp said in a phone interview. He said some of the layoffs came from cost-cutting and others from parts of the equities trading business being automated over the last decade, reducing the need for workers.
But he said he believes the shift toward automation has plateaued for now.
“I don’t think any more headcount will decrease,” Karp said. “In 2014, whatever people are left are the best.”
Now, compensation is on the rise to keep the “the best” equities traders from jumping ship to other banks.
The Wall Street Journal’s Aaron Lucchetti first reported news of the Options Group report.