According to a late January press release from salary benchmarking site Emolument.com, risk management professionals in London are earning a pretty penny. London is, of course, a very expensive city to live and work in, but risk managers (also known as risk controllers) average well over £100,000 a year ($150,000).
More on risk managers
The job of a risk manager is to analyze potential causes of accidents or loss, recommend and implement preventive measures, and come up with plans to minimize costs and damage should a loss occur, including hedging and the purchasing insurance. A primary responsibility is identifying weaknesses or developing problems that could threaten company goals or objectives.
A risk manager is a coordinator, educator and communicator. The specific responsibilities of a risk manager are largely determined by the structure of the firm. She must be flexible and able to adapt to a variety of professional cultures (financial, legal, technical, commercial) and have strong communication skills.
Risk manager compensation in London
Emolument.com analyzed their salary database of 587 financial industry professionals working in risk departments in London at the level of vice president or equivalent and notes the following trends:
- Compensation increasing steadily: Base salaries for risk managers have grown on average by 4.5% annually over the last two years, while bonuses are up by an average of 33% per year.
- Top-tier bank risk professionals can count on large bonuses: While salaries were only up by around 1% a year for the last two years, bonuses soared by more than 65%, emphasizing the importance of risk control to banks today.
- Increasing demand for risk professionals: Emolument.com notes that pay packages have been rising related to a recruitment drive across London. The press release notes: “Risk departments are taking on a life of their own: while they used to be a part of middle office, risk teams are now stand alone entities, with hundreds more staff than before the financial crisis.”
Statement from Emolument.com CEO
According to Thomas Drewry, CEO at Emolument.com: “With a dearth of seasoned risk professionals, managers can name their terms, especially when it comes to bonuses. Over the last few years, risk teams leaped to the fore when some institutions came close to collapse and showed just how valuable they could be, and have been hot property ever since, which is reflected in their pay.”