Press release from spinnaker consulting
Some very very nice numbers.....which concur with my figures (generally speaking)
SHIPBROKING AND CHARTERING SALARIES AND BONUSES
BONUSES paid to freight traders this year for 2009 have been a “picture of extremes” according to recruitment consultants Spinnaker.
While some companies have not paid bonuses to staff in freight trading roles, others have paid between 200% and 300%, particularly in the dry market, says Spinnaker chairman Phil Parry.
Following the market crash in September 2008 and the plunge in the Baltic Dry Index, expectations were high for a “bloodletting” in 2009, according to Mr Parry. With the surge in Chinese imports of iron ore and coal buoying the market however, the last year has seen a two tier market open up between the ‘haves’ who called the market right in 2007/2008 and the ‘have-nots’.
Some of the biggest bonuses ever seen in shipping were paid between 2005 and 2008. 100% bonuses were commonplace for freight trading and broking personnel in both the physical and derivatives markets. More traditional chartering staff performing a scheduling rather than operating role, were receiving bonuses within the 20% to 60% range, Mr Parry says.
Although the rumour-mill did rather exaggerate quite how many chartering millionaires were being created, “Bonuses of between 200% and 400% were being received by top performers and senior managers in hands-on trading roles.”
Spinnaker is secretariat of the Maritime HR Forum and also conducts detailed annual research into freight trading and operations salaries and bonuses on behalf of trading clients. “We are often asked about ‘market salaries’, but there isn’t just one market out there. The banking, fund, shipowning and trading sectors are all very different. Ownership structure and style, a company’s trading philosophy (asset player, transportation company, freight operator, speculator) and the degree of attention paid to HR practices all dictate pay and bonus philosophy.”
Shock and wage restraint were the first reactions in 2009 with some redundancies of under-performers and junior brokers, according to Spinnaker. Some 40% of companies froze salaries last year, with 13% expected to do so for 2010.
Hiring freezes have been lifted in most cases and Spinnaker notes an upturn in the maritime recruitment market since September last year, with reductions in the time it takes to make a placement pointing to returning employer confidence. Spinnaker is making three times as many broking, chartering and freight trading placements than it did last year and the level of vacancies in the operations segment has risen considerably, Mr Parry says.
The tanker sector has notably picked up and Spinnaker has made more placements in the last quarter, particularly in the product and chemical tanker markets, than in the previous three quarters put together.
If there has been little change in basic salaries since 2008 as far as freight trading or broking staff are concerned, 2003-2008 saw salaries rocket, “particularly for junior chartering staff in the first six or seven years of their career,” Mr Parry explains.
The entry level for graduate freight trading and broking staff was typically around £25,000 to £28,000 by 2008. “Graduate recruitment has started to pick up in 2010 after a very quiet 2009”. Salaries in the UK are closer to £25,000 than the higher end of the scale, Mr Parry says. This compares with starting salaries in the US of $40,000, with salaries in mainland Europe a bit lower at between €24,000 to €28,000.
During the high period freight trading staff could quite commonly double their salaries within two to three years, Mr Parry says. “Very good freight trading and broking staff were attaining salaries of £70,000 to £100,000 within the first five years, with bonuses over the same period moving from a modest 15-30% at the outset to 100% plus for good performers after five years.”
Presently, median to upper quartile salaries for freight traders with 2-5 years experience range from €65-80,000 in mainland Europe, £55-65,000 in the UK, $120-150,000 in the US and S$90-140,000 in Singapore. “By definition, the median to upper quartile only reflect one-quarter of people in the market,” explains Mr Parry. “There are of course many people earning more and less than these figures, but it is in this pay range, rather than above the upper quartile as it was in 2007-2008, where most recruitment is now taking place.
The exception to this picture is some players in the commodity trading market where the trend towards selling CIF rather than FOB means freight departments are expanding and in some cases starting up - the demand for chartering staff has therefore increased and there is some pretty active poaching going on, not least in the Geneva market.
With salaries rising so fast, employees were hitting salary ceilings within the first 10 years of their career, Mr Parry says. “In basic salary terms many organisations cap freight trading salaries at £100-150,000 so a seasoned freight trader and his colleague in his twenties might be earning the same salary.” This, he says, should come as no surprise. “This is a market where numbers speak for themselves. If you have the aptitude you are just as likely to get rewarded when young as someone with 20 years’ experience.”
“Naturally, we’re delighted that we’re doing well at the moment. We’re actively recruiting staff ourselves but nevertheless keeping a close eye on costs and cashflow. With so much newbuilding activity and global economic recovery fragile to say the least, we’re keeping a close eye on the horizon!”
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