Tuesday, March 20, 2012

I-Banking payscales / Investment Banking Salaries

From the link: http://www.careers-in-finance.com/ibsal.htm

Going into 2011, starting salaries for investment banking positions with a bachelors degree (assistant or junior analyst position) should range from $100,000 to $130,000 after bonus. Starting salaries with an MBA degree (associate position) range after bonus from $90,000 to $180,000. These salaries vary with firms and with the region of the country you are in. Bonuses typically would be 10-50% of salary to start and can move to one to three times salary later.

Lately, salaries have increasingly included an equity component which may not be liquid for up to three years, although as an analyst you would typically be sheltered from this. This is good for the banks because it makes it much harder for people to move around.
As we write this in December 2010, banking salaries and bonuses are on the rise as several large banks are reporting record profits. The public perception that high banker salaries may have worsened the financial crisis of 2008 / 2009 is not forgotten, but with high profits many investment banks will be forced to pay good bonus compensation to retain talent, despite the PR risk of doing so. 

Salaries are Bounding Back. All-in compensation took a substantial hit in 2008 with many firms paying low to zero bonuses (the dreaded "goose egg"). Starting offers in 2010 and many year end bonus numbers for 2009 were up substantially, although typically down from their peak in 2007 (overall, down 10 to 30% from peak, depending on the firm and position). Bonuses being paid at the beginning of 2011 likewise look to be up, but in general still not quite at their pre-recession peak. Bulge firm salaries typically run 20% to 40% over boutiques and regional firms (although there are prominent exceptions to the rule). Forecast salary ranges in the 2010 to 2012 period are as follows:

Salaries in Investment Banking (with bonus)

Job Level Salary Range Typical All-in Comp Prerequisite
(degree/yrs experience)
First Year Analyst $90K - 150K $125K Bachelor's
Third Year Analyst $120K - 350K $165K Bachelor's
First Year Associate $150K - 250K $180K MBA
Third Year Associate $300 - 500K $350K MBA
Vice President $350K - 1MM $700K 3-6 years
Director / Principal $400K - 1.5MM $900K 5-10 years
Managing Director / Partner $500K - 20 MM $1.5 MM 7-10 years
Department head $800K - 70MM $3.5MM 10+ years

Note: This table is based upon conversations with banking insiders about yearly bonuses expected to be paid between December 2010 and February 2011. MM denotes millions. K denotes thousands of US dollars.

Examples of Specific Salaries in 2008/2009
We are hearing a lot more diversity in compensation levels than usual. This is less true at the analyst level where firms try to harmonize compensation with "The Street". Firms will raise starting offers, more or less, in lock step at this level. However, the situation differs at more senior levels - even mid Associate.
A related salary trend involves compensation across areas. Obviously, with the new financial reforms, certain areas like prop trading, institutional equity sales and securitization are under pressure. In contrast, other banking areas like restructuring, health care M&A/financing and debt capital markets are in growth mode and there is substantial upward pressure on salaries amidst renewed hiring.
Compare Salary to Other Business Careers: [College Graduates | MBAs ]
View list of top business recruiters of MBAs and college graduates

Also Check Out:

Investment Banking Salary Tales:
Den of Thieves
By James Stewart
The Wolf of Wall Street
By Jordan Belfort
Rigged: The True Story of an Ivy League Kid Who Changed the World of Oil, from Wall Street to Dubai
By Ben Mezrich
The Insiders: A Portfolio of Stories from High Finance
Investment banking tales.
Ugly Americans
By Ben Mezrich
At Bonus Time, No One Can Hear You Scream
This is a short novel, written sort of in the style of a diary. It starts out at "B minus 58" - 58 days until bonus communication. It is about the paranoid unhinging of a London investment banker as he counts down the days until he learns his bonus numbers. If you're in the capital markets business you know what I'm talking about.
No Tears: Tales from the Square Mile
More stories from the London i-banking world.