Insolvency and restructuring bonuses reach £11,000

• Bonuses in restructuring set to reach 15 per cent of salary in 2011, yielding an average bonus of £11,000
• 2011 will see I and R workforce grow 25 per cent from 2010
• Specialist directors enjoy 17.5 per cent rise in salaries to an average £117,500

Insolvency and restructuring professionals are set to receive average bonuses of £11,000 as UK companies struggle to stay solvent.

Bonuses for I and R professionals are set to rise from 10 to 15 per cent of salary as firms struggle to source sufficient numbers of experienced personnel for the rapid rise in demand.

Shaila Verma, executive consultant of the insolvency division at accountancy and finance recruiter Marks Sattin, says “Many businesses are currently under pressure to refinance as loans made before the recession have expired and business models have come under greater scrutiny. Post-crunch credit is much harder to come by and many companies – especially retailers – are struggling to demonstrate their businesses are viable in the current market.

“The insolvency and restructuring sectors are growing as a result and in the resulting war for talent, remuneration packages are on the rise with an increased opportunity for bonus. So while salaries for the majority have grown relatively modestly, bonuses will rise sharply as employers manage the best people to look after the rapidly growing workloads.

Salaries in senior positions have risen sharply. The most dramatic rise was for I & R directors, whose average salaries rose 17.5 per cent to £117,500 in the last year. At director level, this compares favourably with other roles in accountancy practices. Audit directors saw a salary hike of 5 per cent last year and in forensics salaries were flat. For senior managers, salaries have risen by 11 per cent and have reached an average of £75,000, with some Big 4 firms offering up to £92,000.

Verma says: “The highest flying directors are being offered £150,000 by new employers eager to tempt them to jump ship. The very recent boom in I & R work following a relatively quiet couple of years has put a premium on experience. It’s much harder to find senior managers and directors with the skills needed to lead growing I & R teams than it is to track down newly qualified accountants interested in gaining I & R experience”.

While 2009 and 2010 saw almost no hiring of I and R specialists, research by Marks Sattin has found that headcount in I and R is set to increase from 2,030 to around 2,550 between Q4 2010 and Q4 2011.

Verma continues: “Growth in I & R departments has traditionally been associated with a reduction in the size of other departments within accountancy firms. But the current economic conditions have changed this. Investment departments and M & A are growing as many companies are looking to expand and are hopeful of growth in the coming year.

“The reason I and R is looking so healthy at the moment is because businesses with flawed models which have clung on, thanks to finance secured through deals when credit was readily available, are only now having to face up to their problems. Retail has been hit particularly hard as big-ticket spending remains subdued and the increase in online shopping and diversification by the supermarkets has rendered many high street names effectively obsolete”.

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