written by Emmanuel Olaoye, Compliance Complete
Top compliance officers at the biggest investment banks can earn $2 million to $3 million a year and a chief
compliance officer at a mid-tier bank can earn between $500,000 and $700,000, as the threat of enforcement action
and reputational damage from being investigated for accounting, sales or trading violations drives hiring compliance
at financial services firms, a Wall Street recruiter said.
Jason Wachtel, who runs the search firm JW Michaels & Co., told Compliance Complete
his firm has posted senior compliance jobs every day for the last five months.
"When I'm speaking to the chief operating officer or the chief financial officer and they're looking to hire somebody, I tell them if you guys get someone who is going to keep you out of the headlines it might be worth the extra pennies they are getting," he said, adding that the demand for compliance talent ranges across the board, from banks to hedge and private equity funds.
Big fines against HSBC and JPMorgan and the hedge fund SAC Capital — and other firms — over compliance failures have prompted financial firms to seek compliance professionals who can help shore up these deficiencies, Wachtel said.
Firms are also looking for experienced people who can help them to implement complex new regulations like the Volcker Rule into the internal compliance program, he added.
These reports come from the firms themselves, not just from recruiters. For example, several big banks have said they will boost hiring for their compliance departments in 2014, with JP Morgan committing $4 billion to hire 5,000 extra employees to fix risk and compliance issues after being on the end of heavy sanctions from regulators, the Wall Street Journal has reported.
Also, HSBC has reportedly increased its global compliance and anti-money laundering workforce by 1,600 persons over the past six months, following the firm's publicized problems with regulators over AML violations that led to a $1.9 billion fine by US authorities in 2012.
For a mid-level compliance professional, the going rate is between $150,000 and $275, 000 depending on whether the experience is with a top bank or a mid-tier one, Wachtel said. Junior professionals at top banks earn between $75,000 and $140,000. In mid-tier banks, the pay is between $60,000 and $100,000, said Wachtel. The $2 million to $3 million salaries are snared by top compliance executives at the biggest banks, but even at a mid-tier bank a chief compliance officer can earn between $500,000 and $700,000.
Hedge funds and private equity firms are paying much higher salaries for many compliance roles than banks or broker-dealers because "there is a lot more risk working for an alternative asset management firm. The CCO signs the form ADV. Also in the bank there is a lot more support," Wachtel said.
When it comes to recruiting for a compliance role, firms typically look for "best athlete candidates" with good academics from a top college and extensive work experience, Wachtel said.
A candidate with six years of Bank Secrecy Act experience at a top-tier institution will have little difficulty in getting hired by a major bank, but a candidate whose experience comes from a second-tier financial institution will have a harder time, Wachtel warned.
In the current environment, even if a candidate's compliance experience is limited, excellent academics and an ability to understand the complex rules can help a candidate get hired, Wachtel said.
Firms who are hiring en masse need to be thinking about how their new recruits will fit into the firm's risk culture, said Eddie Barrett, director of Deloitte's Human Capital Consulting group. He said it was important to know how potential candidates view the role of compliance and risk.
"A whole bunch of people are coming with different ways of thinking and different mindsets about what compliance and risk is there to do....If you bring a lot of people in at all levels, including leadership, you are going to have a level of culture change whether you like it or not."
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