Career Tracks: Salaries Climb for Bank Specialists in Big Cities

Two recent bank compensation studies confirm a widely known truism: It pays to specialize.

A survey by the KPA Group, a New York-based recruiting firm, estimated that base salaries in the region have jumped by as much as 6% annually in specialized areas since 1994 and are continuing to rise. In 1992 and 1993 they barely rose.

Data from the Chicago-based Bank Administration Institute confirm the KPA Group's findings. According to the institute's annual nationwide study of banking salaries, the average base salary for a compliance officer climbed to $41,300 in 1996 from $40,800 a year earlier, while the average salary for a head of data processing and information systems climbed to $56,200 from $53,600.

Len Adams, executive vice president of KPA Group, said his firm found most of the demand driving heftier raises for specialists in areas like compliance, technology, trade finance, risk management, and auditing.

He predicted salaries will continue to rise. "Notwithstanding all the layoffs, there are pockets of banking that need people and seem to have some difficulty finding them," he said. "With shortages like that, I don't see salaries staying stagnant."

Bankers confirmed the KPA Group's and the institute's finding. "Salaries have certainly strengthened in areas like compliance because the number of specialists is not growing as rapidly as the rules change," observed Fredric Tordella, chairman of MTB Bank in New York.

Bankers and industry observers, however, remain more cautious about prospects for any major surge in salaries across the board. "Mergers have dumped a lot of good people onto the street, and that's keeping wages down a bit because there are so many qualified people out there," Mr. Tordella observed.

The KPA survey is limited to the New York metropolitan area, where banking salaries are among the highest in the nation. The banking institute said there are marked differences in banking salaries, depending on the size of the bank and its market. Big banks pay more, as do those that operate in major markets.

Among the KPA Group's findings: The general manager of a foreign bank typically made $330,000 in salary; the president of a large local bank with $50 million or more in capital made around $260,000; treasurers got $275,000 on average, foreign exchange traders $170,000, and compliance managers $90,000. Back-office managers earned $92,000 in the domestic market and $120,000 if they handled international operations.

The average salary was $250,000 for managing directors in the investment banking sector, $110,000 for vice presidents in domestic private banking. The average human resource manager made $115,000, executive secretaries $42,000, and mailroom supervisors $31,000.

The salary figures do not include bonuses or other performance-related pay.

Mr. Adams emphasized that despite the many hard-luck stories, the job picture in the banking industry is far from bleak. He also noted that many institutions that adopted consultants' recommendations and cut their staffs to the bone have discovered they are now short-handed.

"Reengineering doesn't work," Mr. Adams stated flatly. "If you want your revenues to stay stagnant, fine, but the moment demand increases you're right up against your maximum capacity."

One popular solution, he noted, is temporary help. "We call it borrow a banker," Mr. Adams said.

"It's pretty widespread, and many institutions use it on a 'try before you buy' policy." In more cases than not, he added, banks wind up hiring temporary staff for permanent positions.

Outside major U.S. financial centers, salaries can be lower. In Miami, for example, the manager of a foreign bank branch or agency earns only $185,000. A treasurer earned $86,000, and a compliance manager earns $75,000.

Mr. Adams sees no reason why salaries should not continue to improve.

"Despite all the naysayers, banking is still a very viable field and banking is certainly not about to go away," he observed.

Still, he warned, some people are bound to find themselves out in the cold even as others find new opportunities.

"The danger is for people who find themselves doing one little piece of one little job at a big bank," Mr. Adams said. "There's a tendency at larger banks to develop a bureaucratic mentality only to find out that just doing your job isn't enough to help keep it."

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