Executives at foreign broking companies are sporting 1,000-watt smiles. Reason: they have just received an average bonus of 200 per cent of their annual salaries for 2004. That is up 75 per cent over the previous year.
Hedge funds, which have been poaching talent at huge salaries, have played a key role in the bonus surge. To prevent their staff from leaving, the foreign brokerages have been forced to hike the compensation structure.
"This year we have seen quite a jump in bonus payouts because of a sharp surge in institutional volumes," said a senior HR consultant with a Mumbai-based firm.
Market sources said institutional trading made up 60 per cent of the total traded volumes on the Bombay Stock Exchange and National Stock Exchange.
Buoyancy in the Indian markets and strong participation from foreign institutional investors resulted in volumes hitting a new high. Whether the indices go up or down, brokerages benefit from the higher traded volumes.
The FIIs were net buyers of $8.5 billion worth of Indian securities last year.
Sandeep Surana, senior consultant at the HR firm Executive Access said: "Last year had been phenomenal for the equity markets with volumes jumping through the roof. The bonus payout in foreign broking firms has gone up 25-40 per cent over levels in the previous year (2003)."
The head of human resources at a foreign brokerage told Business Standard: "Equity markets have witnessed a spectacular run last year and employees have received handsome bonus packages this year. While the fixed compensation portion of salaries has jumped 24-40 per cent, the bonus payouts range anywhere between 50 and 300 per cent of their annual salaries."
Tarun Bali, CEO of HR firm ABC Consultants said, "Due to the huge buoyancy in the markets last year, the bonus payouts and increments have been more than 100 per cent in many firms."
Broadly, in capital markets, increments this financial year are in the range of 20-35 per cent, while bonuses are anywhere between 50 and 150 per cent.
Making a pile
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While the fixed compensation portion of salaries has jumped 24-40%, the bonus payouts range anywhere between 50 and 300% of the annual salaries.
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Whether the indices go up or down, brokerages benefit. The FIIs were net buyers of $8.5 billion worth of Indian securities last year.
- Hedge funds, which have been poaching talent from the market at fantastic salaries, added to the equation.
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