Are banker bonuses overhyped?

I found BOA’s 2013 bonuses from an old post. I wasn’t that impressed.
1st year associates:
Mid-tier: 60k-65k (base: 125k)
2nd year associates:
Mid-tier: 85k (base: 140k)
3rd year associates:
Mid-tier: 115k (base: 160k)

People are always bragging out million dollar bonuses and all that. Do people have to wait until MD for that kind of money? Would it make more sense to work more normal hours in management consulting, and then try to move to private equity? 100 – 200k in NYC doesn’t seem like a lot. And I know some firm’s compensation was far worse.

 
mrb87:

Ok, find a better paying job as a 22-year old.

Seriously, what's your fucking point? "Overhyped"? By whom???

I guess Associates would be more 25-28. But I agree, what the hell is he complaining about? Those are bonuses most people will never touch as base salary.

"Better to remain silent and be thought a fool than to speak out and remove all doubt." --Abraham Lincoln
 

i think your numbers are for a 6 month stub. here is what i've heard/read about from people:

Assuming you do banking right out of college and start at age 22 and are analyst for 3 years:

Associate pay- A1: ~200-250K (125 base, 250 all-in is top bucket)- age 26 A2: ~250K-280K (140 base, 100-130 bonus)- age 27 A3: ~300 (160 base)- age 28 VP: very, very, variable. Could be ~400-~500 depending on performance.- age 29

Someone correct me if im wrong but these are numbers i've heard from talking to people, overlap of posts on WSO/dealbreaker and other resources. it is variable y/y or bank to bank but thats why there is a range.

Also, think about it like this. most PE shops need to give an incentive to analysts to NOT stay for a 3rd year and pay them more than a 3rd year analyst and near an associate level. This makes sense as lower/mid team MM PE shops to Mega Funds could pay- 180k-250k+ all in (base, salary + carry if applicable).

Hope this helps

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 
AnalystMonkey2769:

i think your numbers are for a 6 month stub. here is what i've heard/read about from people:

Assuming you do banking right out of college and start at age 22 and are analyst for 3 years:

Associate pay-
A1: ~200-250K (125 base, 250 all-in is top bucket)- age 26
A2: ~250K-280K (140 base, 100-130 bonus)- age 27
A3: ~300 (160 base)- age 28
VP: very, very, variable. Could be ~400-~500 depending on performance.- age 29

Someone correct me if im wrong but these are numbers i've heard from talking to people, overlap of posts on WSO/dealbreaker and other resources. it is variable y/y or bank to bank but thats why there is a range.

Also, think about it like this. most PE shops need to give an incentive to analysts to NOT stay for a 3rd year and pay them more than a 3rd year analyst and near an associate level. This makes sense as lower/mid team MM PE shops to Mega Funds could pay- 180k-250k+ all in (base, salary + carry if applicable).

Hope this helps

These are the numbers I previously provided. Overall street sentiment is very optimistic for upcoming bonus years. Veeps saying it's the best year they've had since 2009/2010 (dealflow-wise) at BB's (M&A is choppy so I can't speak for elites, but equity/LevFin & other debt offerings are roaring) so bonuses should be high next year.

As we know, banking is very cyclical. Let's hope this is the start of good things to come, albeit for a four year cycle. Then, get the hell out.

The advisory business is also a pretty small component of overall bank revenues. I'm sure you've noticed banks' increasing reliance on serving as FICC flow monsters (DB, JP, Barc, Citi are prime examples). Success of banks performance within this sector will also play a large role in how bonuses actually turn out. Regardless, should be better than years passed.

 
AnalystMonkey2769:

i think your numbers are for a 6 month stub. here is what i've heard/read about from people:

Assuming you do banking right out of college and start at age 22 and are analyst for 3 years:

Associate pay-
A1: ~200-250K (125 base, 250 all-in is top bucket)- age 26
A2: ~250K-280K (140 base, 100-130 bonus)- age 27
A3: ~300 (160 base)- age 28
VP: very, very, variable. Could be ~400-~500 depending on performance.- age 29

Eh, I'm always amazed where people on this board get their wildly inflated information about salaries. Those numbers above are maybe achievable for the top performers, but trust me, they are definitely NOT the norm. Quite far from it. You will almost certainly make significantly less.

Put it this way -- one of the guys working for me (at a fairly prestigious multi-billion dollar hedge fund) is a second year analyst. I don't want to say his salary here, but I will tell you he lives in a so-so apartment in a so-so building (no doorman or gym or anything like that) that he shares with a roommate in a not particularly expensive neighborhood. Ask yourself if that's the lifestyle you would have if you were really making the money described above.

EDIT: Oh, and to answer the OPs question: "Do you have to wait till you're a MD to make million dollar bonuses?" Yes. In fact, most people have to wait even longer than that.

 
Best Response
lovelaw27:

I didn’t realize asking a question = complaining. Don’t be so sensitive. Don’t people just want to leave in 2-3 years for private equity anyways, so they can make more money? I also heard PE companies are starting to prefer management consultants now.

Lol whats your angle?

Regardless, that assumption is not really true. PE shops want consultants or those that have actual operational experience (consultant dont have operational experience, they just give advice w/a solution to a problem presented, they dont actually run a company, hence not operational- this is another convo) for the "operational" side of PE, aka once the fund takes over the company or is deciding if it can add value or not.

From personally talking to people at Ares, Gores, Oaktree etc. they still want bankers for the financial engineering/due diligence/transaction side. A firm like Gores however, will take both as they have an actual in house operational team which would want consultants, but their "M&A" team generally only takes bankers.

Then again you have a top top fantastic firm like Leonard Green which doesnt really do operational improvements at all, and just offers extra earn-outs to management of newly purchased company to improve themselves and solely highers associates that are ex-bankers (im sure there are 1-2 exceptions, but feel free to peek a look at Ares/LGP website and see profiles). there are no absolutes but this is just the norm from what i've seen.

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 
AnalystMonkey2769:

Regardless, that assumption is not really true.

Thanks for the response, but I wasn’t making any assumptions. I was simply asking questions to determine what makes more sense. MBA-->Investment Banking-->PE or MBA -->Management Consulting -->PE. I get moving into PE is going to be difficult either way.
 

Much of the problem is people quote top bucket numbers as their benchmark. Regarding your analyst, hedge fund comp structures are pretty variable, and anyone smart is building their f u account anyway. Career bankers actually value the medium-term stability and the reasonably predictable (less lately) pay schedule.

 

I agree the numbers posted in this thread are overly optimistic.

40% of Associates got $ZERO$ bonus at my BB in 2011. I don't have a similar stat for 2012 but the numbers posted above seem like something from 2006-7 timeframe, not 2013...

The markets are ripping this year so I'm hoping things could be improving. Trading activity should be very strong and M&A is picking up. But there are still lots of layoffs everywhere. And management knows you can't leave if they stiff you. Where are you going to go? Hiring still seems pretty low.

If you suck at the job you will get laid off ASAP. Job security is low but the pay is still decent. Nobody is getting million dollar bonuses on the sell side unless you have been on the job for a looong time and have proven your worth to bring in $$$$$ of business.

 

that really does suck for those associates. i dnt knw what id do if i got 0 bonus- fuck. and the #s i quoted were confirmed to me by people at my firm (granted the firm i will be working at pays a little above street so these #s are very much achievable for those in my scenario)

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 
AnalystMonkey2769:

that really does suck for those associates. i dnt knw what id do if i got 0 bonus- fuck. and the #s i quoted were confirmed to me by people at my firm (granted the firm i will be working at pays a little above street so these #s are very much achievable for those in my scenario)

First of all - a 0 bonus at banks would have been a kiss of death 5 years ago; but post crisis many (not all) banks took so much flack for big bonuses that they raised the salary and lowered the bonus. Net, you still get almost the same. So a zero bonus isn't as bad as it used to be (at many banks).

Second -- as for those "third year analysts at a bank make 300k, yo!" numbers...do the math. Last year even Goldman's average per-employee total comp was 399K. http://online.wsj.com/article/SB100014241278873239683045782454823331710… But that's average across all employees in the firm, including the CEO's $27 million, and the ~$10 million that each of the senior partners gets, and however much money all the non-partners and senior VPs with 10-20 years experience get. If you think third years make $300K and first year VPs make "could be 400-500 depending on performance", then how much does a guy with 10-20 years experience? It will help if you draw a distribution graph -- for your statements to be true, the guys with 10-20 years experience would have to be making about the same or even less than than the first year VPs. Oh, and the numbers are even worse than they sound, cause that "399K average per employee total comp" also is total comp const including things like benefits and insurance and medicare and employer-paid SS taxes that you don't see on your takehome. So the amount employees get is less.

Those numbers you quote are probably achievable by the absolute top performers, but they are NOT the norm. Clearly, 99% of your class cannot be in the top 1% of your class's pay distribution.

 

Ex velit sunt eos doloribus consequatur. Et rerum ducimus earum sed aliquid ducimus laboriosam. Sed molestiae aut et aut sint rerum quae.

Ratione repudiandae ipsa et in sequi excepturi. Consequatur nesciunt corporis ut rerum rem. Esse nesciunt voluptatum occaecati in inventore.

Dolores quasi qui totam consequatur. Aut non velit dolor ut omnis. Explicabo nostrum cumque soluta deserunt voluptates. Non et est assumenda accusamus maiores.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”