Lifestyle & Exit Ops

Money is, without a doubt, one of the biggest motivators for having a career on Wall Street. Every year thousands of college graduates are lured to the industry by promises of hefty paychecks and the possibility of becoming the next Gordon Gekko. This begs the question, “How much do you really make on the Street?”

There is no easy answer to this question as the pay scale varies greatly between industries, career levels, the state of the economy, and the employer. Despite this, there is still some solid, general information available to give you a good idea of how much you can make in each industry. WSO has put together a rough outline of the compensation one can expect across a number of different careers in finance. Please keep in mind that these are by no means on-the-dot accurate numbers, but rather to give you a general overview of what you may expect.

It is also important to keep in mind that as you move up in your career, the numbers become far more unpredictable. An MD working for Goldman Sachs’ Technology, Media, & Telecom division might be pulling in a $500,000 salary with a year-end performance bonus of $10,000,000, whereas an MD at a smaller, regional investment bank may have a salary of $500,000 with a year-end performance bonus of $500,000. What makes the disparity in these numbers even more interesting is that they could be switched around, with a regional MD pulling in seven-figure bonuses and a bulge bracket MD pulling in a more modest six-figure bonus. For more information, please check out our Compensation Database or do a search for compensation using WSO's Search function.

investment banking compensation
This page illustrates the wide range investment bankers can make across different seniority levels including analyst, associate, vice president and managing director compensation. Given the fact that such a large percentage of their compensation is tied to the investment banking bonus, the pay investment bankers receieve each year is highly volatile and depends on a variety of factors including the economy, the overall performance of the firm, the performance of their group and last but not least their individual performance.

private equity compensation
This page illustrates the wide range private equity professionals can make across different seniority levels including pre-mba associates, vice presidents, managing director and partner compensation. Given the fact that such a large percentage of their compensation is tied to a firm's carried interest, the pay PE professionals receive each year is highly volatile and depends on a variety of factors including the economy and the overall performance of the fund.

Venture Capital Compensation
This page illustrates the wide range VC professionals earn across different seniority levels including analysts, associates, vice presidents, junior managing directors and partners. Given the fact that such a large percentage of their compensation is tied to a firm's carried interest, the pay VC professionals earn each year is highly volatile and depends on a variety of factors including the economy and the overall performance of the fund.

Sales & Trading Compensation
This page illustrates the wide range S&T professionals earn across different seniority levels including analysts, associates, vice presidents, managing directors and partners. Given the fact that such a large percentage of their compensation is tied to their bonus, the pay S&T professionals earn each year is highly volatile and depends on a variety of factors including the economy, their individual performance (as measured by their P&L) and the overall performance of their division and company.

Management Consulting Compensation
This page illustrates the wide range consulting professionals earn across different seniority levels including analysts, associates, vice presidents, managing directors and partners. At the junior levels, most of the pay is in the form of salary and a relatively small bonus. At the more senior levels, a larger percentage of the compensation is tied to billable hours and clients engaged.

Relevant Discussions on Wall Street Oasis:

 
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There are a number of perks that come with a job in finance. They do, however, vary greatly from industry to industry and firm to firm. The list below is by no means comprehensive, but to give you a better idea of what the perks are for a couple of the industries.

Investment Banking Analyst

  • Free car service home after a certain hour
  • Free dinner and/or other meals if you're in the office for a certain amount of time or past a certain hour
  • Discounts on financial services (checking accounts, savings accounts, credit cards, etc) in addition to the standard services (401k contributions, health coverage, etc)
  • On-site gym, childcare, or cafeteria

Management Consultant

  • Large amounts of frequent flyer miles, eventually enough to earn special designations by airlines, depending on the firm
  • Large numbers of rewards points, depending on the firm
  • 401k contributions, health coverage, and other standard services

This is just to give you a general idea of what the perks of your job may include. For industries that don't work as long of hours or travel as much, the perks may be less, but there will undoubtedly still be some little things the firms do to make your lives easier. Also, keep in mind that at a small or newer financial services firm or consultancy, the perks may not be nearly as good as they may not be able to afford them. For a better idea of what firms offer, see the Relevant Discussions on Wall Street Oasis below.

Relevant Discussions on Wall Street Oasis:

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Our Company Database now has thousands of compensation data points organized by Company and position. In 2013 we will also be providing an extensive compensation report as part of the Company Database that will compile, slice and dice the data in as many ways as you can imagine.

Feel free to search away and please help us build the database by filling in some data points yourself!

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Investment bankers are, essentially, middlemen. Bankers connect the sellers of a company with a buyer and advise them through the deal process. Your responsibilities as a junior member of the deal team will mainly revolve around creating pitch books and financial models. You will occasionally have the opportunity to interact with clients, but this is often limited at the analyst and associate levels. As you progress in your career, your responsibilities will change in this respect. As a more senior member of a deal team you will find yourself interacting with clients more often. Investment banking, at the highest levels, often revolves around the relationships between senior bankers and the management teams of corporations.

Here are some quotes taken from WSO’s guide, "A Look Behind the Wall":

Quote:

Each deal team has an MD, Director/Senior VP (different terms at different banks), VP, Associate and Analyst; sometimes it's just an MD, VP, Associate and Analyst and on small deals it might just be a MD, VP and Analyst or MD, Associate and Analyst.

The MD doesn't do much beyond the initial deal sourcing. The most senior person on the team "runs" the deal, reviews all materials, speaks with the client and contacts the buyers if it's a sellside M&A deal.

Standard work style: Analyst creates first draft of presentation or analysis and shows it to Associate. Associate comes back with changes. Analyst makes changes and shows it to Associate again. Associate comes back with more changes, Analyst makes them and then VP sees it and makes changes. Associate/Analyst make changes, VP reviews again and makes more changes, Associate/Analyst make changes, then MD reviews and suggests changes and Associate/Analyst make changes. Rinse and repeat.

And here is an example of a day as an analyst:

Quote:

  • 9:00 AM – No fire drills today, so I get to the office at a normal time. The morning is fairly slow; I'm mostly just making further revisions to the presentation and Offering Memorandum for Client A from yesterday.
    A fire drill is an emergency where the Analyst has to produce something under a very tight deadline (30 minutes to an hour). It's usually client-related and often turns out to be pointless after the fact.
  • 12:00 PM – Multiple requests from different MDs at the same time. One of them wants to see an analysis of some deal-related documents that Client B and the buyer are exchanging.
  • 3:00 PM – Have to run a Premiums Analysis for another potential client, which I'll refer to as Company ARGH because dealing with them is so painful.
    A Premiums Analysis lists all public deals in a certain market (for example, mid-stream oil companies) in a certain deal size range (over $5 billion) in a given time period (since 2006) and establishes the median 1-day, 20-day, 30-day, 60-day (and sometimes even more) premium paid to each seller's share price so that the company in question knows what to expect. The average is usually in the 15-35% range; a company will rarely sell for only 5-10% above its current share price.
  • 6:00 PM – Analysis takes much longer than expected. Onto making revisions to Client C's model since they have once again sent over a flood of additional information throughout the day.
  • 10:00 PM – Finish up work there and discuss ongoing efforts on presentation for Client A with
    Associate. It's only Tuesday and I'm already tired of this week, so I finish up quickly.
  • 1:00 AM – Go home. Changes took longer than expected. That happens a lot in banking.
  • 2:00 AM – Foolishly decide to go work out despite being extremely tired. Thank goodness for 24/7 gyms.
  • 3:00 AM – Get back, even more tired. Write a quick post on Mergers & Inquisitions.
  • 5:00 AM – Pass out and sleep for a few hours.


WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, private equity, venture capital, private wealth management, hedge funds, and management consulting. While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.

Related Discussions on Wall Street Oasis:

-What type of work do first and second year analysts do?
-Day in a life as an analyst
-What do you do at your iBanking job? />
-The life of an analyst

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Making the move to the buy-side is often a goal of investment banking analysts, as well as a dream for many undergraduate students. Because there are so many different types of hedge funds and jobs within those HFs, there is no "standard" day. Our goal at WSO is to give you as good of an idea as possible, so we will update this as we come upon more information.

Long/Short Equity - 2nd Year Equity Research Analyst (by WSO user KevinNYC)

Quote:

  • 5:45 am: Wake up! Turn on the TV and watch CNBC for 20 minutes before I roll out of bed. Check to see what news has hit the tape: Asia and Europe markets, macro-economic indicators, and futures markets. While I am very intrigued by the overall market, the market structure of my fund requires complete hedging so I only isolate events which will affect my universe of stocks. Today, same store sales data is released. I take note of the retail chains with technology exposure.
  • 6:30 am: Head out for the morning commute. Bring sell-side research papers back to work that I brought home last night to read. I need to call the Goldman Sachs analyst to figure out assumptions used in his Intel model.
  • 7:00 am: Arrive at my desk. Open up Bloomberg, Outlook, and Position Monitor. Quickly check our current positions to make sure there was no substantial overnight move. Skim through the 75 emails I received since yesterday. Every morning at 8:00 am we have a morning meeting with the entire technology team. I need to send an email out highlighting any sell-side or company specific information that was released relating to my universe of stocks. Luckily, most important information is sent directly to me by the sell-side sales reps, investor relations at the respective companies, and Bloomberg alerts -- how did this business work before email?
  • 8:00 am: Attend meeting. Talk about some important notes that were published this morning. For example, the Morgan Stanley analyst has found out through Asian channel checks that Apple has ordered enough supplies to produce 13 million more iPhones for this calendar year, 2 million more than was previously estimated. While I don’t cover Apple, my universe includes semiconductor companies that sell to Apple. I am excited to update one of my models because we are long a significant supplier to the IPhone.
  • 8:30 am: Stare at market. Bells kick off and I spend the next 10 minutes watching the
    market adjust to the new day while simultaneously watch our positions. Good start to the day, we have already made $70K!
  • 8:40 am: Organize my calendar for the day. I have a management meeting, a call with the Goldman analyst regarding Intel, and two companies reporting after the market.
  • 9:00 am: Gather questions. I have a management meeting today at our office and so I am responsible for forming questions to ask the management team. I read through my notes from the previous earnings conference call, skim over my financial model, and figure out what the sell-side thinks by reading through research reports.
  • 10:30 am: Attend meeting. I throw on my suit jacket and head up to the meeting with my analyst. I hand over a copy of the questions to my analyst, which he combines with some questions of his own. I greet the CFO and IR Director whom I have met at a previous conference. The meeting begins and the analyst and I start digging in.
  • 11:30 am: Update model. Using the information obtained from the meeting, I update our model. I dash into my manager’s office with a smile on my face and tell him we need to short more of the company. I tell him what has changed after the meeting and explain how it further justifies our thesis. He agrees and we discuss a long-side hedge to remain market neutral. Finally, after a lengthy discussion, we enter our new trades and update the portfolio.
  • 1:00 pm: Call with Goldman. My goal is determine what assumptions the Goldman analyst is using and how he chose them. After a lengthy debate, I come to the conclusion that the analyst has no great reasons to downgrade Intel except for the fact that he didn’t have enough stocks in his “underweight” category. I quickly tell my manager about the call and explain that the stock is trading lower on account of this research report. He agrees and we buy some stock on the recent dip.
  • 3:00 pm: Send out earnings previews. The market closes and we end $2M up on the day. For the last hour, I spend my time writing up earnings previews for the stocks reporting after the close. The earnings preview is a brief summary of our thesis, our current positions, and what we think the company will print.
  • 4:00 pm: Listen to calls. I need to listen to 2 calls in the next hour.
  • 6:00 pm: Send out earnings review. I send out my notes from the call and recommend some tweaks to our positions. I am pretty happy with the outcome despite having mixed prints. We were right on our long position, and it is up 6% after-market, however despite our short printing in-line, managements’ outlook was better than expected. The upbeat guidance has pushed the stock towards a 5% after-market gain. In summary, a pretty good earnings day resulting in a net $1M profit on the pair trade.
  • 7:00 pm: Leave! What a busy day, I barely had time to get up from my desk to go to the bathroom! I pack up some reports I didn’t get a chance to read during the day and take my laptop with me. I look at my schedule. Next week involves insane travel: Las Vegas for an industry conference, Phoenix to visit fabrication plants, Silicon Valley to meet with ten companies, and finally San Francisco for a sell-side technology conference before I head home. One day at a time; off to the gym.
  • Event Driven Strategies - 3rd+ year Analyst (by WSO Certified User Mr. Pink Money)

    Quote:

    • 6:45am - Wake up
    • 7:30am - In the office
    • 7:30am to 8:30am - Breakfast, Check inbox/messages, Read paper/blogs/etc., morning meetings
    • 8:30am to 1:30pm - Depending on the day, read transcripts/filings (30% of time), investment meetings/calls (20% of time), build models (40% of time), investment memos/emails (10% of time). This is a juggling act since I'm usually working on 1-2 new ideas and 2-3 portfolio positions during the week.
    • 1:30pm - 2:30pm - Lunch/Pay Bills/ESPN
    • 2:30pm - 8:30pm - Meet with PM (ranging from 30 minutes for brief updates to 3 hours for research findings) and more modeling/reading/conference calls rest of the day
    • 8:30pm - Midnight - Go home, dinner, gym, read paper/blogs/etc., read more filings
    • Sometime between Midnight - 1:00am - Bed

    I'm not lying when I tell people I am a professional footnote reader. A typical year as an investment professional:

    • First quarter of the year can be pretty busy as many funds tend to put more/new money to work and companies begin to hold analyst days, etc. Combine that with earnings season in late January and I easily end up putting in 12-16 hours over the weekend.
    • Moving into middle of the year, things definitely slow down a bit over the summer and I only work mornings (8am to noon) as needed during the weekend.
    • The end of the year is Jekyll and Hyde. Hours are usually manageable, but I've had some of my worst weekends in October/November.

    Global Macro Trader - Partner (by WSO Certified User Bondarb)

    Quote:

    • 545am Get to work, print up and read overnight research pieces both from internal analysts and from the sell-side. Check in with traders in London for color on the overnight session.
    • 830am If its a Monday my group has a group meeting where we go over the calendar for the week, talk about new trade ideas, and discuss management of the positions we already have on. We also do meetings like this in front of big events such as central bank meetings and payroll reports to go over our thoughts and strategies ahead of these events.
    • 930am-430p Read research, watch markets, do trades if appropriate, talk to sell-side analysts and traders, talk to coworkers about markets, go over charts, work on my own creations (model-type things). Sometimes go to meetings with economists and traders from sell-side who come into our office.
    • 430p leave call levels with our internal nightdesk and go home.
    • 5-9p Go do something social
    • 9p log into my computer from home and check on overseas markets. chat online with our internal nightdesk and with sell-side guys in Australia, New Zealand, Tokyo, etc. This is what i'm doing now.
    • 10p go to sleep
    • 2am get call from nightdesk...something happened overseas and a position is running badly against me. Drag myself back to my computer, log in, and see whats happening. decide to do nothing. i can still get 2 hours of sleep if i go back to bed. This happens about 20% of nights.
    • 545am do it again!

    This is not to say you can't get a general idea of life for a hedge fund analyst from it. Certain types of funds will weigh heavier on certain areas. An equity research associate will probably spend more time on filings, an analyst at a quant fund will probably spend more time working on coding, and a global macro analyst may spend more time on current events.

    WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, private equity, venture capital, private wealth management, hedge funds, and management consulting. While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.

    Related Discussions on Wall Street Oasis:

    Additional Resources:

    Return to Main FAQ Page