As we have recently mentioned how international bankers have been “milking it” in Brazil, it is also a fact that local investment bankers in Brazil have joined the “bonanza”. Be it the guys at BTG, Credit Suisse or Itau BBA, everyone is “riding the wave” of M&A;, debt issuance and credit markets in the world’s 6th largest economy.
According to Bloomberg, typical salaries for managing directors in Brazil are theequivalent of about US$350,000 to US$500,000, not including bonuses,compared with about US$300,000 to US$400,000 at top U.S. banks. Pay increases when executives switch firms can command raises of as much as35 percent (read here how Brazil’s salaries can be up to 85% higher than the US and Europe).
Sure, the talent pool is limited. But if an investment banker at Itau BBA can make up to R$1 million a year in salary (not including bonus), what would the bank’s headquarters tell the 5,000 and counting employees that were laid off in 2011?
Anyway, these extraordinary salaries can be explained by the fact that the industry’s total revenue from investment-banking feesin Brazil was about $891 million last year, although that’s downfrom $1.16 billion in 2010 and the record $1.6 billion in 2007. The uptrend seems to be fading away…can the salaries keep up?