On average, for example, would an M&A group or a Healthcare group pay its analysts more in bonuses because the hours are generally more demanding, or does it not make a difference, or is it all based on how much money the group is bringing in, regardless of hours?
Would then a less hour-intensive group such as ECM pay its analysts less?
Thanks in advance!
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I would like to know the answer to this question as well.
It's sort of a black box when it comes to that stuff, but usually it's based on how much revenue your group brings in. Who cares if you're in the office 90 hours a week working on pitches. You are losing money instead of making any.
The way analyst bonuses are given out is that they 're in 'bands' or tiers. So you have 1st/2nd/3rd/4th tier but usually anywhere between 3-7k between each class. I wouldn't necessarily say that you will get more bonus as an analyst in M&A and Healthcare, BUT, your MD will definitely have more clout in compensation meetings if your group brings in a lot of revenue. It's sort of along the lines of "Well, my group generated 30 mill in fees for the firm this year, but the Sponsors group generated 2. My analysts get 1st tier". In any case, the 'bands' are set from the beginning with a max and a min and then divvied up from there.
No. But usually groups that perform better (not more hours) get allocated more "top of the class" bonuses.
So we're talking bout a max differential of what, say 10 - 15 K either way?
"So we're talking bout a max differential of what, say 10 - 15 K either way?"
should be...i am VERY curious to see how the analysts fare this summer. think it'll look like 2003 or maybe 2004.
Okay thanks guys, that was a big help.
Jimbo - Please keep us posted on that!
At least, not at the Analyst level.
HerSerendipity is right that MDs who have brought in more revenue will tend to have more clout when issues of compensation come up.
But there are a couple problems with assuming that people who work more get paid more:
1) Working more does not equate to more revenue... revenue is typically more correlated to market conditions rather than hours worked.
I'm doing a ton of pitches right now because conditions are terrible, that doesn't mean my group is making more money though.
2) At the Analyst level it's more about who you worked with and the deals you worked on rather than strictly the number of hours. I had some friends who did not do as much work as me last year and still got the same or almost the same bonus because their groups were easier on rankings or liked them more.
Even if a certain group is allocated more "tier 1" bonuses, that doesn't mean it's necessarily better to be there... it's highly specific to the bank/group.
BTW, I've been hearing rumors/seeing spreadsheets floating around claiming that bonuses this year will not be significantly different from last year or perhaps just down a little.
Given M&A activity is down 50% I find this VERY hard to believe, but just as an FYI... we'll see what happens, my prediction is more like 2004 numbers who knows.
Maybe bonuses won't be down from last year. Perhaps the senior level people will take the hit instead. For instance, if an MD got paid 3M last year and gets paid only 1M this year, for him the hit is huge but in relative terms that is still an impressive paycheck. And that additional 2 million can dish out bonuses for 25-30 analysts.
Yeah so many humanitarians in investment banking.
What are '04 levels? I know some of you in the know have the top and bottom bracket in mind so you don't say it, but I'm curious to see what your predictions are.
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