Associate base pay #'s 2013

Does make it confusing I agree. Seems like the convention is to call the 6-7-month period post MBA (graduate in June) until Jan of the following year the Assoc 0 period.

AnalystMonkey2769:

sorry if this seems obivous or stupid lol but what is year "0"? is that simply when you start as a first year associate? why not call the first year associate Y1 second year Y2..etc.

It is a peculiar convention, but the reason has to do with when bonuses get paid out. As an analyst, you get paid your year end bonus at the end of your entire first year, same with the second year analysts, etc...so you start in June/July and one year later, in June/July, you get your bonus number (though probably not actually paid out until Aug/Sep).

For associates, they label the A0 to reference your first 5 or so months on the job because they pay your bonus at the end of the calendar year, to align with the rest of the bank's bonus payouts. Presumably, the thought is you are not just going to be there for a couple of years and leave, so they are putting you on a regular bonus schedule. I'm sure the idea there is so they aren't paying out relatively high bonuses a quarter or two before the actual year end results are in. The other possible factor is the pay bump/progression. From an HR standpoint, there has to be some sort of mechanism to distinguish between the pay grades, if you will, of the all the different associates. Instead of saying, yeah the second year associates (who have only been 17 months) get $XXXk bonus, etc.

The actually reason why they use 0-3 instead of 1-4 is probably unknown. My guess would be so there is less confusion when comparing numbers across years. When I see the A0 designation, I immediately recognize that it's an abnormal naming convention and it clues me in that the comp numbers might not be equivalent. For example, an A0 are probably going to make $50k salary (prorated $100k base) plus a prorated bonus of maybe $80k...so their total comp (excluding sign-on, relocation, etc.) is going to be around $130k...which looks odd when compared to the $260k or so an A1 makes.

Truthfully, it's probably not even an official designation. More likely it's something a bunch of WSO'ers derived while trying to compare salaries across banks, lol.

Regards

Thanks - good intel my man!

AnalystMonkey2769:

so Y0 is simply a 1st year associate and Y3 is a 4th year associate?

Technically they are in their 4th calendar year of working at the bank, but they don't have 4 years of experience. In actuality, a Y3 is somewhere between 2.5 and 3.5 years.

It basically looks like this...

.....A0..............A1..............A2..............A3..... 6 months + 12 months + 12 months + 12 months

The best way to think about it might be to say the number references the 'full year bonus' that person is going to get. A0 doesn't get a full year bonus, A1 gets their first full year bonus, etc.

Regards