IB vs ER comp

As an analyst (confusingly, in ER, the lowest rank is called “associate”), the base is the same, but IB receives an equal-to-larger bonus. If deal flow is negligible and bonuses aren’t meaningful, an IB first-year might get ~40% and an ER first-year might get ~20%. In a better year, an IB first-year might get ~80% and an ER first-year might get ~50%. All in all, expect it to be maybe $135K in ER and $160K in IB, all-in. With an equal signing bonus, maybe $145K in ER and $170K in IB, all-in including sign-on.


This gap widens through the associate phase. IB bonuses grow closer to 100%, ER bonuses never really get far above 50%. ER associates in years 3-6 should expect comp in the $200Ks, whereas, in IB, they can be earning $100K more. That’s when the difference really gets you.


At the VP level, comp can catch up a little bit (proportionally) if you’re a standout ER VP. If not, it doesn’t. It’s hard to put exact numbers on this, as it’s so person-to-person and year-to-year, but an ER VP in that “in between” stage when they’re covering 4-5 names and also working under an MD can maybe make ~$300-400Kish, whereas a VP in IB might earn ~$500-600K.


Among MDs, it really depends. From my understanding, not so great ER MDs earn mid six figures, ER MDs in solid sectors with good reputations might earn high six figures or low seven figures, but it takes a standout ER MD to earn more than a couple to a few million each year…which is what a mediocre IB MD will make. But for a top IB MD…they can easily rack up tens of millions each year.


So, basically, IB starts out earning maybe ~20% more all-in for first or second years, which grows to ~33% more as an associate and VP, and ~50%+ more (but can grow to 100 or 200% more for standouts) as an MD. However, if you’re a top performer or in a top ER group, these differences can be smaller.



Assume you’ll probably make ~25-50% more before exiting, for the “average person” in these tracks, in IB. If you’re in an intense ER group, this will make you angry, lol. Understand that the reason for this is that IB brings in revenue directly, whereas ER does so partially in the form of fees from investors, but often, indirectly by offering coverage in exchange for banking deals.


One sliver lining for research, though… I do think you’ll have more meaningful responsibilities earlier on, and so if you’re diligent, you can possibly exit to the buy side earlier, and, in the long run, make just as much. But you have to be really good in order to do this, whereas a mediocre IB analyst can go through the motions and score a decent PE role in the end.


One “anti-silver lining” for research, though… if you’re in a hot sector, the hours are probably just as bad if not worse than in a mediocre IB sector, and you’re not compensated for that in terms of pay or exits. This can be infuriating.


One “neutral” for research … bank matters less, analyst (MD) you work under matters more, both in terms of exits, learning, and culture-setting. In ER, there’s no “what’s X bank like,” it is all about your MD. An II-ranked team at Jefferies is more “bulge bracket”-esque than a low-performing team at Goldman, and your hours, comp (as you get more senior), and exits will reflect that.