Economy
Good times in energy |
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| Written by Gary Howes | |
| Tuesday, 04 November 2008 | |
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The lid has been lifted on the new sector of excess: energy companies.
As the days of City excess pass with the collapse of the old financial system one would be forgiven for assuming the UK was entering an era of prudence - an era where massive pay rises and bonuses are out of favour. Not so.GRS Group, a leading UK executive search consultancy has today released details suggesting an exodus away from traditional City jobs into energy jobs thanks to soaring pay levels and potential bonus pay days. This at a time when the Government estimates there are currently 2.5 million people living on fuel poverty. Household utility bills have soared on the back of rocketing global fuel prices which peeked over the middle of this year but are coming down thanks to global recession fears. GRS showed that salaries in the energy sector have increased 12% year on year, and 2008 will see the energy sector recording average bonuses of over 20%. In the past year, downstream energy placements in risk, tax, legal and interim have increased 37%, 24%, 39% and 38%, respectively as the commodities sector has outperformed other markets and remained immune to turmoil in financial markets. Asset backed utilities have recorded bumper profits, fuelling acquisitions and leading to an increased focus on trading arms, which has resulted in a surge in recruitment in the sector. The most high profile acquisition activity is that of EDF taking British Energy.. Pay gap has closed significantly Ken Brotherston, CEO of GRS, says that demand for professionals still can’t keep up with supply and that remuneration is reflecting this: ‘Trading firms are having to develop more advanced and robust risk systems to keep up with increased volume and volatility. As such, energy companies need the best talent there is and salaries are reflecting this. The pay gap between utilities and banks has closed significantly. Now able to offer strong bonuses and improved base salaries, energy companies are capitalising on the fallout from the financial crisis and, with ever increasing market consolidation, have been able to commandeer top European talent disillusioned with financial services. Professionals are fleeing the investment banks, which once offered safety and progression, for the sophisticated structures of the major utilities or the dynamic environment of smaller utilities trading houses. Calls for a windfall tax News of the energy company boom time will not sit well with much of the UK population who have witnessed their energy costs rising. BP's record profits (148% up year on year) sparked renewed calls from both government and opposition for oil companies to cut fuel prices, and demands for a windfall tax from unions and left-wing MPs. Gordon Brown warned the oil companies yesterday that people 'expect answers' on when falling oil prices would feed into lower petrol prices and fuel bills. The prime minister said that he was 'determined' to see petrol prices come down to reflect the fall in global energy prices. However energy companies have argued that refiners already suffered lower returns on capital than the average for British industry, and warned that additional taxes would hit investment in oil production and infrastructure. |
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