You're hired; here's your bonus

As The India Story Attracts New Entities,
Brokerages Offer Sign-on Bonuses To Lure Talent

Mar 19, 2007
Ashish Rukhaiyar
MUMBAI

TILL ayear ago, it was almost de rigueur for analysts and research heads of a foreign brokerage house to join a rival entity in the initial months of the new calendar year. On the other hand, people from domestic entities were known to switch jobs in the months of May and June. The reason being, foreign brokerages paid bonuses in December, while domestic houses paid the same in March.

However, times have changed and more and more brokerages are luring talent with a sign-on bonus. One just has to sign on the dotted line, and the bonus is paid on the spot to the new recruit. Incidentally, this is just another sign of the acute dearth of skilled and experienced manpower in the Indian brokerage industry.

“The market won’t wait for anyone and the competition is immense. More often than not, brokerages are not in a position to wait to get the right talent and so go in for sign-on bonus conditions,” said an HR director of a domestic brokerage. The sign-on bonus clause also removes the risk of losing a person to any of the rivals, who might jump in the fray before the person actually joins the new place, he added.

Industry sources add that the manpower shortage has been further accentuated by the fact that the India growth story has been attracting many new entities into the country. Brokerages are losing their analysts to not just rival brokerages, but also to hedge funds and private equity players.

In the recent past, many domestic and foreign brokerages like ICICI Securities, Deutsche Securities, HSBC Securities and Religare Securities have lost some of their key people and research analysts to either new entrants or related industry players. The newly-found aggressiveness of entities like Goldman Sachs, which parted ways from Kotak in March 2006, Lehmann Brothers and CSFB have also led to a huge churn in the capital market industry.

“Generally, a foreign entity, when looking for people, tries to poach other foreign houses as the cultural roadblocks are automatically taken care of,” said the director of a foreign brokerage house. However, there have been a few exceptions. Recently, Dipankar Choudhary, who tracked the banking sector at ICICI Securities (i-SEC), moved to Deutsche Securities. The foreign house is also believed to have taken on board a capital goods analyst from HSBC Securities. Deutsche had recently lost its equity head to a private equity player.

On the other hand, i-SEC lost a couple of people to Centrum Stock Broking, which is being managed by Devesh Kumar, the former head of equities team at i-SEC. R Amarnath has joined Centrum Stock Broking as head (corporate finance) after leaving i-SEC, where he was the head of equity research. Meanwhile, i-SEC has hired A Murugappan in place of Mr Kumar. Mr Murugappan is coming back to i-SEC after a brief stint with private equity fund Deeva Partners.

Among other instances, Amitabh Chakraborty has moved from Brics Securities to Religare Securities, which recently hired Sangeeta Purushottam as head of institutional business.

Interestingly, some of the brokerage houses have also been going to management schools in Goa to recruit analysts.