Why is there no 70-100% year end bonus in consulting post MBA like they have in IB?
With all the high fees they receive for engagements even with smaller firms, I'd assume they'd at least a little more than IB. Is it why there's a high turnover in consulting as compared to IB (because they're not compensated well)?
Consulting firms charge by billable hours like law firms. The fees are not in the same league as the success fees banks get from advisory/placement work.
I dont understand why people still want to work 60 hour weeks when they could make a lot more in high finance such as IB and AM
Oh I don't know.. a totally different business model perhaps?
Depends on the firm because I know A&M has uncapped bonus structure where I've heard of people get up to 4x-5x base salary bonuses.
This is true. Other restructuring consultancies (Alix and FTI) also have a similar model in place altough at a smaller scale.
Consulting is people heavy & compared to IB, has low profit margins.
Banking is people light & compared to consulting, has high profit margins.
I'm sure you can do the math.
It has to do with fee scalability. With consulting and billable hours, you have a cap as to how much $ per hour you can contribute to your firm so bonuses have a lower ceiling. With banking, fees are based on transaction size and % fee cut instead of hours worked so there's a much higher earnings ceiling.
Bankers work far more hours than consultants
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