12/04/2009

Nomura Offering Big Bucks to Top Recruits

Nomura is apparently putting its money where its mouth is.

Pushing forward with efforts to become a major broker of structured products in the U.S., the Tokyo bank has been trying to entice salesmen and traders capable of leading the effort by offering them guaranteed one-year contracts of $3 million to $5 million.

Those packages, consisting of both salary and bonus payments, are worth about double what the targeted candidates are currently earning. Lower-level recruits are also getting sizeable raises. For example, a vice president who just joined Nomura's mortgage-bond trading desk got a 120% pay hike for the upcoming year. And a managing director was guaranteed $1.5 million, up from a projected $1 million at his former employer.

The exact terms of Nomura's contracts are still the subject of speculation at this point, but some of the richest ones apparently are being fashioned for group heads who would arrive with the beginning of the 2010 calendar year. And while Nomura has been generous with structured-finance recruits who are already on board, it evidently has only recently upped the ante to current levels.

It's also difficult to say exactly how much specific personnel are taking home. Nomura began building a structured-finance group from scratch in March as part of a broader push to boost its presence in the fixed-income market. Since then, it has built a securitization staff of about 30.

A layer above the group heads Nomura is now seeking, the bank brought in longtime structured-product trader Charles Spero in May to co-head its fixed-income area with Jeffrey Michaels. Spero and Michaels both previously worked at Barclays, by way of the bank's 2008 takeover of Lehman Brothers.

Traders Kee Chan, Mike Gramins, James Im and Ross Shapiro also made the jump from Barclays, as did sales executive Patricia Sullivan. Nomura won over a half-dozen Bank of America staffers in October as well, including sales specialist Alexis Knopp. Also in October, former J.P. Morgan collateralized loan obligation salesman Ross Heller came on board.

The bank is still seeking a number of additional salesmen and traders of asset- and mortgage-backed bonds. Depending on how its business fares, it may look for some origination and structuring professionals down the line.

Executive recruiters said Nomura's pay packages are especially noteworthy because of the guarantees it is willing to offer. That's a powerful incentive for prospective recruits to come on board, as unsteady market conditions keep most of the bank's rivals from considering such moves. "Any time a bank is building up a team, they're going to have to pay out more to get the job done," one placement professional said.

Nomura's guarantees might also help convince potential hires that it is serious about carving out a piece of the industry. Nomura has maintained active structured-finance banking and trading desks at various points in the past, and as recently as 2007 was trying to rebuild its staff. But it shelved that effort amid heavy losses on residual mortgage holdings.

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