News & Press
News & Press - Tuesday, March 16, 2010 21:00 - 0 Comments
Bankers and City workers – rush to fix exchange rate for bonuses, salary and vested stock
The start of 2010 saw the usual influx of bankers and City workers converting or hedging their bonuses, proceeds from vested stock and salary payments from foreign currencies into sterling or vice versa.
In order to assist bankers and City workers, World First representatives handed out free dollar bills to those arriving at work. Attached to the dollar bills were flyers outlining tips on how they can best manage their foreign currency exposure resulting from bonus, salary and proceeds from stock paid in foreign currencies.
Elisabeth Dobson, head of private clients at World First said, “At the start of each year we speak to many bankers who know they will receive a cash bonus or proceeds from vested stock in a foreign currency and need to convert it into another currency. For example, some of the US banks, namely Goldman Sachs and JP Morgan, will pay some cash bonuses and issue stock in US dollars. Staff based in the UK will need to convert this into sterling and will look to hedge their exposure to exchange rates using forward contracts. Equally we have a large number of clients converting their salary payments to countries outside the UK or they might receive their salary in euros or dollars and will look to convert this into sterling.”
The beginning of the year is typically when annual bonuses are announced and when those with vested stock can decide whether to exercise and cash in their stock from previous years’ bonuses. It is usually between January and March that employees will receive their cash bonuses or have the right to exercise their vested stock.
Elisabeth added, “In addition to forward contracts, some bankers have been keen to talk about our currency option structures. They are like forward contracts in that you can secure an exchange rate now for a date in the future but they also allow you to benefit from any improvement in the rate.”
As well as bankers and City workers looking to convert US dollars we have also had a larger number of clients who receive sterling bonuses looking to invest overseas, buy a second home or holiday home, pay off an overseas mortgage or convert and send funds back to their country of origin if they are living in the UK.
For more information on hedging salary or bonus payments click here: worldfirst.com/bonus
Refer a colleague, friend or family member and receive a free gift
If you know anyone who could benefit from the services World First offers, we would be delighted to assist them and will offer you a free gift when they register and transact with us. Whether they are a colleague looking to convert a bonus, salary or proceeds from vested stock, or maybe a family member or friend buying a property overseas or simply making transfers overseas, we will offer them better exchange rates and an exceptional service allowing them to manage any exchange rate risk.
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To refer someone today please email referral@worldfirst.com or call +44 (0)20 7801 9080
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