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How much lower is the bonus at good middle market firms vs bulge bracket? Anyone knows what analyst bonuses (last yr) and associates bonuses (this yr) were at firms like weisel / baird / blair? Is the base in line with bulge and bonus about 25% lower? Do these middle market firms pay 100% bonus in cash to associates and analysts or stock is good part of comp?

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Comments (16)

  • CompBanker's picture

    I can only speak to the bonuses received at my particular MM bank, but I believe it to be pretty representative of the rest of the MM shops out there. I will say that I believe that MM banks in general have a much larger bonus band due to the fact that profitability can vary widely by year and there isn't such a defined benchmark like the BBs have.

    In terms of cash/stock allocation, many MM banks (and boutiques) are not public companies. As a result, they are forced to pay their analysts in cash. Also, the purpose of paying compensation in stock is to align the individual's interests with those of the bank. The analyst role typically only lasts 2 years and therefore does not lend itself well to this model. Associates are more likely to see a portion of their bonus in stock, but I don't have any experience in that area, so I'd just be speculating.

    As for the actual $$$s received at MM banks, I'm assuming your guess that bonuses are 25% lower is based on the general obsession for BBs on this board. My experience has been quite difference. In 2007, the bonuses at my bank we're higher than IB bonuses at Goldman Sachs and the rest of Wall Street. In 2008, when banks started to falter, our bonuses were less than 10% off 2007 bonuses. In 2009, when people were reporting bonuses of 20-30k, we received more than twice that.

    So, while I still stand by my comment that I have just 1 data point and that it can vary widely by bank, I wouldn't assume that MM banks pay their analysts any less than the BBs just because they are MM banks.

    CompBanker

  • ledger123's picture

    agree with compbanker. i know a friend at blair that received bonuses that were higher than bb in the same timeframe compbanker mentioned above. heard hw paid at or above street during that time as well.

  • ihatetaxes's picture

    From a friend who works at MM as an analyst, I can verify $70 base and $70 bonus last year. Don't know if that was in all cash or cash/stock.

    CompBanker is right. Last year, when BB were being rocked, MM paid out handsomely.

  • wallstwarrior19's picture

    how do boutiques compare to standard mm banks?

  • 2x2equals4's picture

    What is the standard salary excl. bonuses in London (in pounds) for 1st year analysts ? What about the average for BBs ?

  • In reply to CompBanker
    THE PsYcHoLoGy's picture

    CompBanker:
    I can only speak to the bonuses received at my particular MM bank, but I believe it to be pretty representative of the rest of the MM shops out there. I will say that I believe that MM banks in general have a much larger bonus band due to the fact that profitability can vary widely by year and there isn't such a defined benchmark like the BBs have.

    In terms of cash/stock allocation, many MM banks (and boutiques) are not public companies. As a result, they are forced to pay their analysts in cash. Also, the purpose of paying compensation in stock is to align the individual's interests with those of the bank. The analyst role typically only lasts 2 years and therefore does not lend itself well to this model. Associates are more likely to see a portion of their bonus in stock, but I don't have any experience in that area, so I'd just be speculating.

    Always having the answer to my questions! Search function :)

    Thanks CompBanker! Do you work at a bank based out of the midwest that offers both PE and IB? Based on how you answer some questions, I feel I may start my FT this summer at your firm.

    As for the actual $$$s received at MM banks, I'm assuming your guess that bonuses are 25% lower is based on the general obsession for BBs on this board. My experience has been quite difference. In 2007, the bonuses at my bank we're higher than IB bonuses at Goldman Sachs and the rest of Wall Street. In 2008, when banks started to falter, our bonuses were less than 10% off 2007 bonuses. In 2009, when people were reporting bonuses of 20-30k, we received more than twice that.

    So, while I still stand by my comment that I have just 1 data point and that it can vary widely by bank, I wouldn't assume that MM banks pay their analysts any less than the BBs just because they are MM banks.

    Born to bank. Born to win.

  • In reply to CompBanker
    Bayside0987's picture

    CompBanker:

    In terms of cash/stock allocation, many MM banks (and boutiques) are not public companies. As a result, they are forced to pay their analysts in cash.

    So, while I still stand by my comment that I have just 1 data point and that it can vary widely by bank, I wouldn't assume that MM banks pay their analysts any less than the BBs just because they are MM banks.

    Do you know anywhere that pays analysts in stock???

    If you are at a mid-market bank (I also think it's important to distinguish mid-market from true boutique in this particular case) that is strong in a particular product (Jefferies lev fin, Houlihan restructuring, Harris Williams M&A) this might be the case, and also especially in light of where the traditional 'big banks' are paying over the last few years (UBS, Barclays, GS in particular come to mind as places that have had pretty brutal pay cuts at the junior level), but you should be careful applying this to the "middle market" as a whole, or ESPECIALLY in extending it to true "boutiques".

    It's really a bank-by-bank process these days as all banks are grappling with various transitional issues, personnel management, etc. and the old order has been shaken up. For example, guess who the highest-paying bank was in 2011? All signs point to Wells Fargo. Surprising?

  • In reply to Bayside0987
    timatom90's picture

    Bayside0987:
    CompBanker:

    In terms of cash/stock allocation, many MM banks (and boutiques) are not public companies. As a result, they are forced to pay their analysts in cash.

    So, while I still stand by my comment that I have just 1 data point and that it can vary widely by bank, I wouldn't assume that MM banks pay their analysts any less than the BBs just because they are MM banks.

    Do you know anywhere that pays analysts in stock???

    If you are at a mid-market bank (I also think it's important to distinguish mid-market from true boutique in this particular case) that is strong in a particular product (Jefferies lev fin, Houlihan restructuring, Harris Williams M&A) this might be the case, and also especially in light of where the traditional 'big banks' are paying over the last few years (UBS, Barclays, GS in particular come to mind as places that have had pretty brutal pay cuts at the junior level), but you should be careful applying this to the "middle market" as a whole, or ESPECIALLY in extending it to true "boutiques".

    It's really a bank-by-bank process these days as all banks are grappling with various transitional issues, personnel management, etc. and the old order has been shaken up. For example, guess who the highest-paying bank was in 2011? All signs point to Wells Fargo. Surprising?

    I'm not sure what you're taking issue with or trying to argue.

    All CompBanker is saying is that because many MM/boutique banks are privately held, they are forced to pay analysts in all cash, because paying in stock is the same as buying into the firm (firm in this case referring to a business run more like a partnership than a typical pubic business). This is a good thing for analysts, because for the most part, they're only going to be there for a couple years anyway, and need the cash over some (really) long term deferred compensation.

  • In reply to THE PsYcHoLoGy
    CompBanker's picture

    THE PsYcHoLoGy:
    CompBanker:
    I can only speak to the bonuses received at my particular MM bank, but I believe it to be pretty representative of the rest of the MM shops out there. I will say that I believe that MM banks in general have a much larger bonus band due to the fact that profitability can vary widely by year and there isn't such a defined benchmark like the BBs have.

    In terms of cash/stock allocation, many MM banks (and boutiques) are not public companies. As a result, they are forced to pay their analysts in cash. Also, the purpose of paying compensation in stock is to align the individual's interests with those of the bank. The analyst role typically only lasts 2 years and therefore does not lend itself well to this model. Associates are more likely to see a portion of their bonus in stock, but I don't have any experience in that area, so I'd just be speculating.

    As for the actual $$$s received at MM banks, I'm assuming your guess that bonuses are 25% lower is based on the general obsession for BBs on this board. My experience has been quite difference. In 2007, the bonuses at my bank we're higher than IB bonuses at Goldman Sachs and the rest of Wall Street. In 2008, when banks started to falter, our bonuses were less than 10% off 2007 bonuses. In 2009, when people were reporting bonuses of 20-30k, we received more than twice that.

    So, while I still stand by my comment that I have just 1 data point and that it can vary widely by bank, I wouldn't assume that MM banks pay their analysts any less than the BBs just because they are MM banks.


    Always having the answer to my questions! Search function :)

    Thanks CompBanker! Do you work at a bank based out of the midwest that offers both PE and IB? Based on how you answer some questions, I feel I may start my FT this summer at your firm.


    The Psychology, I didn't work at the same place that you work at now. However, I do know the head of your group, Mr. L and one of the directors, Mr. K....

    CompBanker

  • In reply to timatom90
    Bayside0987's picture

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  • In reply to Bayside0987
    CompBanker's picture

    CompBanker