• Sharebar

Alright, so let me give you guys the rundown (FYI this is my first post).

I interned (unpaid) at a middle market investment bank for 3 months (Sep-Dec 2011) and was offered a job with the firm at the end of the year. The terms were $40k salary + a discretionary bonus of up to 100% of my base salary (so possible $40k bonus). I accepted the position and am still with the firm as of now. The hours here aren't too brutal, I average 12 hour days but during peak times I may have to pull 2-3 all nighters in a period of a couple weeks.

My bonus will be paid out at the end of the year, but I have absolutely no idea what it will be. As of right now the $40k salary I am making seems ridiculously low for 12 hour days plus having to pull all nighters and working on the weekends and pretty much no vacation. I compare this with friends working at Deloitte making $50-60k working 9-5 and it makes me wonder why am I still where I am at.

So, my question to everyone is, should I work for the firm for another year? What percent of my bonus do I need to receive to continue to work for the firm? If my bonus is terribly low, how do I approach my MDs with the news that I am leaving based on compensation?

I am happy to provide more information if that helps.

Additional info:

I am located in Southern California
Deal sizes (primarily sell-side) have ranged between $10-50mm
Bonus is paid at the end of the year

Thanks in advance!

The WSO Advantage - Investment Banking

Financial Modeling Training

IB Templates, M&A, LBO, Valuation + Learn More.

IB Interview Prep Pack

30,000+ sold & REAL questions Learn More.

Find Your Perfect IB Mentor

Realistic IB Mock Interviews. Learn More.

Comments (40)

  • nonos's picture

    Where are you located?
    It really sounds like you're underpaid. Honestly, I wouldn't put too much hope on your bonus because if they've been that cheap with you so far, they probably will be cheap with your bonus too... Anyway, even with 40k bonus, your total comp would be far below the street.

    Start looking for other firms...

  • BBnkr10's picture

    Yeah, I agree. You are being underpaid for the hours, stress, and work you are putting in. How is their deal flow? When you say MM, around what market cap are you talking about? 40k is def under the street norm. Do you get your bonus towards the end of this month?

  • pacman007's picture


    "Don't quit. Suffer now and live the rest of your life as a Champion" - Muhammad Ali

  • pplstuff's picture

    If you get the 100% and you feel you're learning a lot and you're making the right connections and you like run-on sentences, then keep the job. Otherwise, I'd leave right after the check clears.

    I'll do what I can to help ya'll. But, the game's out there, and it's play or get played.

  • tgfp20's picture

    Thanks for all of the responses, very much appreciated. Answers to your questions below:

    I am located in Southern California, and the deals I have completed this year (pretty much all sell-side) have ranged from $10-50mm, with one debt deal that was $150mm+. My bonus is paid out at the end of this month (although I can see my MDs coming up with an excuse to delay my bonus).

    I have an employee review in two weeks, and I am thinking about breaking the news that I am not going to tolerate such low compensation anymore and am going to leave, although it will significantly impact my year end bonus. I expect to get destroyed by my MDs that I am making a terrible decision, so any more input as to what I should do is appreciated.

  • Kassad's picture

    Most definitely underpaid. Unless you get over >$20K for YE bonus, you're doing slave labor. $80K is a respectable number for what you described, in my opinion.

    I think you should kindly discuss the terms of your salary at the YE review. Reason being:

    - You go balls to the wall and demand more money = they may shit on you with the bonus
    - You kindly assert that the work you do is worth more and that you can find better work elsewhere = they take you seriously and will likely not shit on you with the bonus.

    The most important thing in this situation is to have your bases covered. Make sure you can or do find employment elsewhere. Once the bonus is in, if you still don't like the numbers, make good on your assertion and bounce.

    Equities are for chumps.

  • Black Jack's picture

    I would wait until you see your bonus figure to do anything. if it is 40k, then at a small MM firm in socal that sounds about what I would expect you to make. If it is 20 or less then speak with management.

  • TechBanking's picture

    Wait to see what your bonus is. $40k is way low, but $80k a boutique in SoCal may not be. If you like working there, you may want to see where total comp falls out and then have a conversation. If it is low, tell them that you know that you are well below market. If it ends up at $80k, that isn't terrible as a first year at a boutique. Ask them what your salary progression will be and say that you live off of your salary, and it's been hard making bills at $40k. No reason to risk your current job without knowing what the playing field is. If they screw you then, yes, head for the doors.

  • jr253's picture

    Why on earth would you bring that up in a review, presumably before you've found something else?

The WSO Advantage - Investment Banking

Financial Modeling Training

IB Templates, M&A, LBO, Valuation + Learn More.

IB Interview Prep Pack

30,000+ sold & REAL questions Learn More.

Find Your Perfect IB Mentor

Realistic IB Mock Interviews. Learn More.

  • Bearearns's picture

    When you say Southern California. Is that in a city or in suburbs? Because pay differential could be due to that.

    Friends at Deloitte are they working in city?

    I wouldn't make a rash decision until.... a week after bonus. Can you live fine if you don't find work for a year? What is your financial status?

    It may be good to set a bonus target, but just think about finances before quitting. If you quit MBA back on target or just try to find work. You may get raise in bonus talks and may be something you should ask after you get bonus number. Might be appropriate to quote market statistics/friends are making etc. See what they say. Make sure to do it in a nice way and that your appreciative of bonus.

  • guyfromct's picture

    You're at a small boutique, 10-50 is the lower MM, the pay isn't great, but what are your other options? I'd look to lateral.

  • ThaVanBurenBoyz's picture

    1) Do not express disappointment in pay until the bonus hits your account.
    2) Do not tell them you're going to leave. Ever. Go get an offer for them to compete with. They will assume you're looking after (1) above.

  • accountingbyday's picture

    Do NOT bring this up during your review. If your bonus is >=$20k take it with a smile, if it's less tell them that you were really hoping for more, etc... However, under no circumstances do you approach the topic of leaving or being unhappy with the firm until your bonus is in your bank account AND you have another position lined up.

    Honestly, $60-80k all-in sounds about right fresh out of school. You're not at a top place and your salary reflects that. Personally, if you're getting good experience I'd stick it out another year or two. If you're not getting good experience, I'd start looking for other opportunities.

  • tgfp20's picture

    Thanks again for the responses. To answer a couple questions, the firm is located in Newport Beach, and although the deal size experience I have received has ranged from $10-50mm, the firm has completed a few acquisitions in the $200-300mm range.

    So it looks like the overall consensus is:
    -- Do not say anything about leaving during the employee review
    -- Wait until the bonus is in my bank account before discussing compensation and/or leaving because of compensation
    -- Try and get another offer from a different firm as ammo for why I am dissatisfied with my current compensation

    Any more input is appreciated!

  • ThaVanBurenBoyz's picture

    Actually, I wouldn't express disappointment in pay or mention leaving until you have an offer elsewhere. You have no leverage at your level.

  • idragmazda's picture

    Sounds awful. Put together some comps and see if they will move on base. 40 is way way low.

    Super Nintendo, Sega Genesis - when I was dead broke man I couldn't picture this

  • In reply to ThaVanBurenBoyz
    asiamoney's picture

    Actually, I wouldn't express disappointment in pay or mention leaving until you have an offer elsewhere. You have no leverage at your level.

    Agreed, why not wait for the bonus check to hit your account, keep looking for a better job in the meantime, and then if you get an offer, negotiate with your current boss to see if you can get a raise first. That way you won't hurt your bonus/get fired/etc - plus you'll have more leverage to negotiate with the other offer on hand. Better upside and least risk...

  • mgotrade's picture

    tgfp, you're spot on with the cautious strategy. Try to keep a positive attitude and slug it out for a bit longer until you've received your performance review AND bonus. One thing you'll learn as you get a bit more experience is that you are judged based on attitude as well as performance, especially in the early stage of your career. You should really push hard here at the end of the year and demonstrate that you're a critical team member. You will earn much more respect with your boss and can EARN the privilege to discuss your compensation early next year. A boss will ALWAYS be more open to talking about compensation or promotion with someone he sees as a critical member of the team. Do your due diligence on comps, understand that the market is not super awesome right now for employment in finance (BB layoffs, anyone?), and don't ever EVER give your boss a reason to ding you.

    If all that doesn't work, get in touch with a recruiter/headhunter and start looking for a new job.

    "Death smiles at us all. All a man can do is smile back."

  • frooter's picture

    yes you probably are, but whats the alternative? quit? not so easy to find a job these days, takes time...maybe talk to your bosses and ask for raise

  • mongoose's picture

    Back Office monkeys get paid over 70k at some banks. 65k base plus 5k sign on. They might even get a small bonus at the end of the year around 5-10k.
    This is unfair. Shows why the labor market is so inefficient.

  • ladubs111's picture

    Hmm you guys are all too used to NYC prices, in Newport one can find a good place to live for like 600-800 bucks a month which would cost you 1.5k to 2k here in ny. My brother lives in the OC now making mid $40ks and he actually has a *GASP savings account.

    So my point is ya $40k is a bit low, but the pay isn't too low where its leaving you to live in east LA, downtown LA, etc, and at your level you have no leverage. If I was you, i'd change my mindset from I'm being treated like a slave, to I'm paying the rest of the $30k as tuition.

  • MistaBooks's picture

    You may be underpaid, but if you don't mind the job and feel like you are learning a lot, I'd stick with it. It's not like making an extra $20k a year is that huge of a difference. The most important thing early in your career is putting yourself in a position to maximize your future earnings - i.e. getting exposure, experience, and doing something that will set you up for the next step.

    The majority of your life-time income will be earned later in your career, so the most important thing early in your career is not maximizing your income, but maximizing your potential.

    Of course, if you find another job that pays well and is also something that offers a great learning experience, jump on it.

  • In reply to ladubs111
    chrisjr's picture


    If I was you, i'd change my mindset from I'm being treated like a slave, to I'm paying the rest of the $30k as tuition.

    +1. Great approach.

  • milehigh's picture

    Based on similar deal sizes, hours, and location, I'd say you're underpaid. 1st years at firm's I know with similar profiles get between $50k-$55k, with a decent bump ($10k-$15k) over the first 12 months if you perform well.

    As for bonus, all firms say discretionary up to 100%. It puts stars in your eyes, and makes you think you could clear ~$100k your first year out of school working 60-80hrs/week at a boutique. In reality, this means they can pay you anywhere from 0% to 100%, but if the firm has a blockbuster year, you're capped. The phrase "discretionary up to 100%" is for the firm's benefit, not yours.

    Two options:
    1) Sit tight, and wait to see where bonus falls out. If you've been working hard, everyone likes you, and the firm has had a decent year then you could be in for a nice surprise. If the bonus is bad (with your base, I'd say you want AT LEAST $10k, closer to $15k) then start looking if you haven't already. Think long and hard before you call out your MDs on a crappy bonus, it's not worth burning a bridge/references for the potential of squeezing them for an extra few thousand.

    2) Tell them, tactfully, that you are enjoying the work, feel you have been doing a good job, but you would like to be paid more in line with market. (I'd go with number 1 personally. 2 is very risky when the job market is the way it is, and MDs view junior bankers as expendable resources even more than normal).

  • neilol's picture

    Not to highjack a thread - It looks like he's pretty well covered here. I know of a boutique setting bonus cap at 25% of salary..would anyone stand for this as a first year? Salary from what I remember was street comparable.

  • Bobby Digital's picture

    Just ask them what type of bonus you should be expecting. This is bold but don't think it's faux paus.

  • tgfp20's picture

    Thanks again for the responses everyone. What are your thoughts about asking what percent of my bonus I am going to receive (in a very subtle way) during my performance review in a couple weeks? I would like to do it in a way that does not come off blunt or make it seem like my decision to stay with the firm for another year depends on my bonus. Any thoughts on this?

  • In reply to tgfp20
    jpc100's picture

    Just my two cents, but I would pump the breaks a bit. Go on the WSO job boards and indeed.com or whatever and see what else you can find, try to get an offer, and then you'll have ammunition.

    Say your bonus is $20k. You've made $60k in a year out of school while learning skills that will actually transfer to another job when the time comes. Even though you aren't making as much as your counterparts in the city, it isn't as if you're a victim.

  • In reply to tgfp20
    ThaVanBurenBoyz's picture

    What are your thoughts about asking what percent of my bonus I am going to receive (in a very subtle way) during my performance review in a couple weeks?

    Don't do it. Be patient in all of your moves.
  • blackjack21's picture

    Don't ask about it. To sum it up you do relatively smaller sized sell-side deal in California.

    If you made 80k at the end, that's excellent. 60k is ok, but likely not worth leaving for. If it's 50k I would try looking for another job.

    Really it depends on how many deals you guys completed. If it was a down year, your bonus will likely reflect it. But if your team was top bucket, then I'd expect an upper end bonus.

  • George87's picture

    You should expect 20-30% of base as your bonus this year. Definitely don't bring it up in the review. Go fetch some other offers now that you have a year under your belt and come back to them with those offers. Explain that you like the work, people, culture, etc. but that you want to get paid more (in line with peers, street, etc.). You need the other offer to give you leverage in negotiations... if they care about you they will make an effort to keep you, if they see you as expendable they will tell you to take walk. Be tactful and reasonable about it. Good luck.

  • monkeyDD's picture

    As long as your bonus is >= $20k you are fine. If its less, start looking else where, you might want to think SF, I used to live in SC and its not as huge for finance as you would think. However my friend - don't say a word till that bonus hits your account!

  • SirTradesaLot's picture

    My viewpoint is that if they think they can pay you a low bonus and you will stay, they will pay you a low bonus. They are already paying below market, so there's some evidence that they are willing to test the waters. I'm reading this that you are one of very few analysts there, which means if you leave they are in a bind. For them, paying you an extra $10-15K vs. what they would have paid anyway is probably worth not it for them to risk you leaving. I always made sure that people knew what my expectations were, so if they didn't hit that number, I would be upset (it was always a number higher than I really expected). I don't think this is the same as working at a big firm, where doing so is pointless because all of the first couple of years are highly benchmarked against other firms.

    Disclaimer: I graduated a long time ago, so I'm not in your same situation.

    adapt or die:
    What would P.T. Barnum say about you?


  • thedude12r43w's picture

    Honestly, even if you get a 20k bonus you still have it a lot better than your friends at Deloitte. You are in IBD and then are in Big 4.

  • tgfp20's picture

    Thanks again guys. I should have stated this earlier, but SirTradesaLot is correct in that I am one of very few analysts at the firm. The positive to this is I have some leverage in that:

    1) If I leave they essentially have no one to build pitch books, offering memos, management presentations, etc. and handle other aspects of the deal such as diligence/data room management. If they want to fill my position they will have to hire another analyst because there are not enough junior staff to fill the void.

    On the other hand, if I leave at the end of the year I am leaving in the middle of a couple deals which will definitely irritate my MDs. It's going to take a new analyst at least a couple weeks to get the hang of things, so my MDs will not take kind to my abrupt decision to leave.

    Unfortunately I am in a sticky situation here, but I do not think it's worth it to keep taking it in the ass in terms of compensation. I think I will just keep silent until I know what my bonus is, and if they royally screw me over I am going to let them know how I feel. Sorry to keep dragging this discussion on, but any thoughts here?

  • In reply to tgfp20
    SirTradesaLot's picture

    To unlock this content for free, please login / register below.

    Connecting helps us build a vibrant community. We'll never share your info without your permission. Sign up with email or if you are already a member, login here Bonus: Also get 6 free financial modeling lessons for free ($200+ value) when you register!

    adapt or die:
    What would P.T. Barnum say about you?


  • Higheck123's picture

What's Your Opinion? Comment below:

Login or register to get credit (collect bananas).
All anonymous comments are unpublished until reviewed. No links or promotional material will be allowed. Most comments are published within 24 hours.
WallStreet Prep Master Financial Modeling