Double your money, the City poachers are back

No doubt about it, City salaries are once again a "phenomenon". The securities industry is enjoying its best year since 1993, when 100 London employees of Goldman Sachs took home $1m apiece or more. And if that were not enough to send salaries soaring, there are also some aggressive new players in the market place, most notably Deutsche Morgan Grenfell, prepared to pay apparently silly money for sometimes quite mediocre talent. In combination, the two factors make a highly potent cocktail.

Nor is this a phenomenon confined to the star traders and analysts of the premier league. The first and second divisions are doing pretty nicely out of it too, thank you very much. Salaries across a wide spread of posts and companies are achieving unprecedented levels. Less than 150,000 people in Britain earn pounds 100,000 a year or more; getting on for a half of these people may be in financial services of one form or another.

The rights and wrongs of this are one thing. Some will see it as a symptom of everything that's wrong with Britain, while others will view it as an example of British success. But whatever you think, it certainly ill becomes investment banks to complain about poaching and spiralling salaries, as increasingly their senior executives do. For a start it's pure hypocrisy. Most of the critics continue to be guilty of "name your price" poaching tactics when it comes to the superstars.

Investment banks are in any case pure money-making machines. The best of them provide their people with state of the art IT, as much capital as they need, and a top-drawer client list, but essentially it is still the traders, salesmen and analysts that make it happen. If the salaries are silly, it is because the margins and returns are silly too. Plainly it makes sense to poach, say, the top rated telecoms analyst at some insane salary if by doing so it helps win a major international telecoms privatisation issue which pays an insane fee. The problem lies not so much with what investment bankers are prepared to pay as with what their clients are prepared to pay them.

As for the proprietary trading operations, where the really big bucks are made, it's a free country and there's a going rate for the job. In a bumper year like this one, it's bound to be high. Deutsche Morgan Grenfell will no doubt live to rue the day it saddled itself with the very high fixed-cost salary structure it is presently building up. Many of the new recruits coming in at double their previous salaries are not stars at all; they belong to the marzipan layer of City traders and analysts. But then if it all goes wrong, that's Deutsche Bank's lookout.

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
film
News
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
science
News
Dawkins: 'There’s a very interesting reason why a prince could not turn into a frog – it's statistically too improbable'
newsThat's Richard Dawkins on babies with Down Syndrome
Sport
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Arts and Entertainment
Martin Amis: Taken to task over rash decisions and ill-judged statements
booksThe Zone of Interest just doesn't work, says James Runcie
Life and Style
life – it's not, says Rachel McKinnon
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Corporate Tax Solicitor

Highly Competitive Salary: Austen Lloyd: CITY - HIGHEST QUALITY INTERNATIONAL ...

Relationship Manager

£500 - £600 per day: Orgtel: Relationship Manager, London, Banking, Accountant...

Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Test Lead (C#, Java, HTML, SQL) Kingston Finance

£40000 - £55000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home