Russia appeared to be a real El Dorado for foreign bankers: according to Bloomberg Agency, the amount of money they earn exceeds that of their colleagues working in the USA several times, up to US$7 million a year. The Agency takes as examples Ed Kaufman, who left UBS, financial services company, to head Russian Alfa Bank, and Nicholas Jordan, who is going to manage the Moscow department of Lehman Brothers Holdings Inc. New York top managers of the same level earn on average $2-3 million a year and it is interesting that bonuses make the biggest part of their income.

Experts believe there are two reasons indicating this chasm. Firstly, the high pressure Russian market is acknowledged to be the main factor to influence the situation, and employers simply have to increase wages not to let their best workers go to competitors. Secondly, high salaries of foreign top managers working for Russian companies depend on the number of highly skilled specialists the market requires. The research conveyed by representatives of Russian headhunting agencies shows that foreign specialists of the banking sector are better value for money than their Russian colleagues.

In keeping with international standards, a high-grade specialist must be working in this sector for 15 years at least, which is impossible for Russian bankers and top managers. 15 years ago the Russian banking sector was only forming and certainly there were no analytics or managers of Russian origin. Today the best Russian specialists have an experience of 6 years, not 15. Besides, European salaries affect the level of wages paid to foreign top managers working in Russia. In Germany or Italy highly skilled specialists of the banking sector earn about US$10 million a year.

The consequences of extremely fast increasing salaries of foreign top managers in the banking sector lead to the great gap between them and other employees. In some cases incomes of well-paid specialists exceed that of under-paid workers 31.4 times, and the gap is still growing. Last year indicated a 25% growth of salaries top managers working for Russian investing companies get, while the USA showed only a 15-20% growth.

There is one more point attracting foreign bankers to work in Russia: it is Russian taxing policy. Several years ago the Russian government introduced a single personal income tax amounting to 13 %, regardless of how much one earns, while in the most foreign countries this tax depends on wage rate. In the United Kingdom, for example, it may go up to 40% for those, whose income exceeds US$83.7 a year.

The growth is unlikely to stop in the next several years, since more and more foreign investing companies such as Merrill Lynch, Goldman Sachs and Lehman Brothers enter the Russian developing market, which is, by experts estimate, considered one of the most world promising. The number of foreign specialists speaking Russian and willing to work in the RF is not enough to fill all the vacant positions, so the fight for top managers will go on.

Sources:

    www.gazeta.ru
    www.finiz.spbstu.ru

Olga Pletneva