London - Once modest of pay and profile, risk experts are being reborn as rock stars of the banking world – their status and salaries soaring as regulators force financial institutions to clean up their acts.
Industry-wide investigations into alleged exchange rate manipulation, trading scandals at UBS, Société Générale and JPMorgan Chase and HSBC’s $1.9 billion (R20.2bn) fine for lax money-laundering rules have upped the ante for banks already under pressure to curb reckless behaviour that led to the financial crisis.
Now watchdogs and central banks want to see a clear line of responsibility for the avoidance of such fiascos in the future, and as a result, the position of chief risk officer) has jumped up the ranks. Many now sit alongside the finance director as most important after the chief executive.
“The role of the chief risk officer has become broader, higher profile and more influential,” says Anne Murphy, the head of UK financial services for executive recruitment firm Odgers Berndtson.
In turn, salaries have soared. Pay in risk-related jobs rose 6 percent last year and rocketed 19 percent for those who changed employers, according to a report by recruitment firm Barclay Simpson.
HSBC chief risk officer Marc Moses joined the bank’s board at the start of this year, alongside the chairman, chief executive and finance director, and could be paid £6 million (R107m) this year. Chief executive Stuart Gulliver, who could be paid £11.4m this year, says that before the crisis, the bank’s chief risk officer would not have made it into the top 50 earners.
At Spain’s Santander top risk executive Matias Rodriguez Inciarte was its second-highest paid director last year, getting e4.7m (R70m).
Risk officers ensure that potential dangers are monitored and kept in check. That can range from measuring how likely loans are to be paid back to what losses may be incurred from fraud. – Reuters