New York (November 11, 2016) — Options Group announces the release of its 2016|2017 Global Financial Markets Overview & Compensation Report. Options Group forecasts an average global total compensation decline of 2% from 2015 levels. This is based on the US, EMEA, and Asia averages of FICC, equities, investment banking, and wealth management divisions. Compared to 2015, average change in compensation for:
• Global FICC is forecasted to increase 3%
• Global equities is forecasted to decline 9%
• Global investment banking is forecasted to decline 6%
• Global wealth management is forecasts to increase 5%
“The trend around the world is generally negative. Although FICC and debt capital markets performed well compared to last year, they will subsidize equities and equities capital markets bonus pools,” said Options Group CEO Michael Karp. “We are forecasting average global compensation at banks will decline in the low single digits. And that is the best case.”
Options Group’s Report, entitled, “The Year of Reckoning: Political Upheavals, Technology Solutions,” was compiled between January 1st and October 31st of 2016. Forecasts are based on results from the firm's annual surveys, public data such as SEC filings, as well as from the thousands of interviews conducted by Options Group's recruiters globally.
Options Group contends that downward pressure on compensation is not directly a function of the big geopolitical events that preoccupied financial markets in 2016, such as Brexit and the US presidential election. These events certainly contributed in the firm's opinion to a heightened atmosphere of uncertainty. However, rather than being driven by specific events, the widespread decline in pay packages manifests long‐running challenges to financial firms, according to Options Group—specifically regulatory environments, which the firm describes as “harsh and turbulent”. “Political crises have been a driving force behind the severe regulatory regimes appearing around the world,” said Karp. “In the United States, for example, drastic regulatory action is being entertained for reasons other than financial stability. Some banks are still modeling out various scenarios of how they would function if broken apart for political rather than financial reasons.” While headcount rationalization is expected to continue, demand for data‐science talent accelerated in 2016, according to Options Group, and will continue to do so at least through 2020.
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