Bonuses, salary hikes being offered as stock market perks up
After five long years, employees of stock brokerages are being showered with bonuses and salary hikes. Buoyed by the recent surge in market volumes and an uptick in the business sentiment, brokerages have seen their profits zoom.
Most are set to offer employees hikes of 20 to 35 per cent, including fixed and variable components, depending on their current salary, tenure and role.
In addition, attractive bonuses and incentives are being offered to retain talent and maintain a competitive edge, said brokerage officials.
Market revisions for select high performers in critical posts are also making a comeback, they added.
“These market revisions, which used to take place every six months during the last market boom, between 2004 and 2007, are back. We have already implemented an incremental salary hike in June, and are in the process of another revision,” said Dhruv K Desai, Senior VP, Human Resources, Angel Broking.
“An overall improvement in market conditions, and the return of optimism are helping shift brokerages’ focus from survival to growth. A key way to do this is by engaging employees through better compensation and salary packages,” he added.
After May 16, the upsurge in institutional and retail investor participation has helped prop up revenues and profitability of broking firms by 20 to 50 per cent.
“This has taken place, with brokerages doing nothing! Most will pass on the benefits to their employees,” said Desai.
Pallabh Mukherji, Group Head, HR, India Infoline, said: “Since we follow the incentive model, our employees will be getting a better compensation on their variable component, with a primary focus on the sales side.”
Though a majority of the hikes are to be implemented in the FY15 appraisal cycle next April, some brokerages are looking at rolling them out by end-August, depending on whether the market rally sustains.
Some of the positive triggers the market will be looking out for is the line-up of IPOs (initial public offerings), the Budget, and the ₹62,000-crore worth of government papers to be floated to comply with regulator SEBI’s minimum public shareholding norm for public sector undertakings.
“There has been a lot of expectation built up among our employees, who have been waiting for good hikes for some time,” said Vivek Jain, Senior V-P, HRD, Kotak Securities.
“Though our incentive structure will remain the same, employees will earn more owing to the incremental sales offtake resulting from the market rally, and the strong client upsurge. This way, the incentives earned by them will easily double compared to last year,” he added.