Why isn't research included in the WSO Compensation Database?

I think that there is enough interest to warrant the collection of this data and help people understand the industry.

IB is very clearly spelled out when it comes to hierarchy and salary/career progression. It would be nice to assemble this for ER.

One source of confusion within ER is that the title of the entry level position varies from firm to firm (associate vs. junior associate vs. junior analyst vs. etc..) and this makes it difficult to understand the structure of the industry.

Case in point:

http://www.glassdoor.com/Salary/JPMorgan-Chase-Eq…

Those numbers seem to be within the range of all the BB firms.

What I find surprising is that some associates (and in this case I doubt associate = entry level? post cfa? post mba?) make about 100% of their base or more. This goes against the typical answer we hear: bonus is about 50% base.

Anyone interested in helping me compile a more definitive thread to answer a lot of these questions?

 

yeah i would be interested in this as well. I think if we could also breakdown the salaries by region, that would be helpful to some people. PM me if you have any ideas/need any help.

Smokey, this is not 'Nam, this is bowling. There are rules.
 

Glad this is getting some attention.

Thanks for offering to help. I think the best way to start this is to focus on BB and other boutiques with similar ER programs because the most amount of data should be available from these firms.

I also think we should outline the questions we want answered.

So here it goes:

What is the hierarchy of Equity Research? Does it work like IB (Analyst, Associate, VP, & MD)?

What is the starting salary for an entry level position? What is the signing bonus? What is the range of performance bonuses? How many years until you get promoted to the next rank? Do you NEED an MBA to get promoted? Do you NEED a CFA? (Lets not make this a MBA vs. CFA thread) Average annual salary raise? What is the yearly turnover or people in the junior position?

Do you get a big pay raise when you learn your CFA?

What is the starting salary for post MBA candidates? What is the signing bonus? What is the range of performance bonuses? How many years until you get promoted to the next rank? Average annual salary raise?

How long does it take to become a lead Analyst (Research equivalent of MD) and start covering your own stocks? How much money do you make if you are II ranked? How much can you make without being II ranked? Are other ranking equally important?

What are the hours like? What is the typical day like? Does it matter what industry you cover?

Any other typical or worth-while questions worth asking?

I think that all posters should say whether or not they work or have worked in the industry so we don't get a lot of wanna-be's (like myself) posting misinformation.

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UPDATE:

I did some searching and found two of the most informative threads on the forum.

//www.wallstreetoasis.com/forums/howdy-special-offer-limited-time-only //www.wallstreetoasis.com/forums/equity-research-culture

Here is some of the information I compiled from these threads:

What is the hierarchy of Equity Research? Does it work like IB (Analyst, Associate, VP, & MD)? How many years until you get promoted to the next rank?

Analyst - entry level. This is on a training contract and you're not guaranteed a permanent job after this but more often than not you will go on. Grunt work but there'll be a lot of interesting things to do. If you have the time, there's also scope for initiative (and I would argue it's neccessary for long-term career success).

Associate - typically after 2 years of being an analyst but can be 3. A bit more responsibility, possibly coverage of some smaller companies (but you're name won't be the first on the cover).

Vice President - 2-3 years after being an associate. Primary coverage of names that matter (from a commission point of view). Sales and marketing responsibilities.

Director - anything from 2 to 6 years. I've no idea how this is formulated and I suspect it's used to keep people that may be planning to jump ship. You are not a director in the legal sense. From VP upwards there is no theoretical cap on your earnings (below VP there is a range and your performance v your peers will determine where in the range you come) so I think it's all down to title envy.

Managing Director - undetermined, might never happen. Congratulations! You have scaled the heights that mere mortals can only dream of! It's a real shame then that it's a white elephant. I think it's an excuse for the bank to pay out more of your bonus in stock. You also get to sit in more boring firm meetings to decide corporate strategy (oh, and you get to vote on who should be promoted to VP and Director levels if that floats your boat).

What are the hours like?

As with anything in finance this is going to vary from group to group. But my interviewing experience suggest, on average 7am-7pm 5 days week+ a few hours on Saturday. Expect to work everyday and to midnight during earnings week.

What is the typical day like? I was told the best way to think about your time allocation is as follows 25% modeling 25% writing notes/speaking with clients (if you're lucky?) 25% industry research 25% randomness

Here's an alternative answers:

2-4 hours - scanning morning news, morning shout (aka squawk box aka hoot & holler), client calls. 6-8 hours - collating information, devising investment theses, writing research. 1 hours - coffee, lunch, making fun of your colleagues.

Does it matter what industry you cover?

The pay in research seems to be a function of two factors: trading revenue and access to management revenue. The larger the industry or the more active the industry (M&A), the more trading revenue, the higher potential for a big bonus.

How large is a typical team?

Most BB will have 1-2 juniors and the lead analyst. Most boutiques will be just you and the lead analyst.

Two important follow up questions: How important is to to be on a II ranked team? How important are other rankings?

Hopefully someone can verify my answers.

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  • Entry-level is associate
  • After that you rise to an associate director / senior associate role
  • then director-->ED-->MD (at which point you're also called an analyst)

  • II ranking is very important (probably matters more than anything else), especially for higher ups and pretty much dictates incentive comp (not to say there is a causal relation there...but highly ranked analysts tend to get paid much more)

  • If you're in a group of a highly ranked analyst, more likely than not there will be more money to spread around (bonus figures higher for associates)
  • Depending on the bank, bonuses numbers are slightly lower than IBD. Top bucket I think is 100% base (in talking with BB ER folks)...or at least it was when things were normal.

  • teams at a BB vary a lot (2-8 per coverage group)

  • most likely if you are at a BB, no client interaction for you...most phone time will be with junior sales people looking for your expertise.
 

How would you compare II rankings to Starmine?

I am considering working for a team that is not ranked on II but one analyst is the #1 stock picker and other analyst is the #2 EPS estimator for his industry according to Starmine?

I'm also (pleasantly) surprised to hear that top bucket (in normal times) get near 100% of base at BB. Makes me think that my hope/assumption of 50% is attainable.

THANK YOU FOR ANSWERING SOME QUESTIONS

When all is said and done, I'd like to compile all the answers into "The complete guide to Equity Research"

Follow me on Twitter: https://twitter.com/_KarateBoy_
 
Best Response

Some very generic comments here. I work as a first year in ER and I'll give you my perspective.

The latest I have ever stayed during earnings season was like 10pm and that was because we had three companies report that day. The way earnings work is you write your pre-release note like a few day before, then you have your breaking news note that comes out 30-45 minutes after the company released and then finally you have your big analysis piece. People who stay past midnight are either really inefficient, their team is really lean or they have like 4+ companies reporting that day.

I have yet to work one single weekend yet and my seniors tell me that they probably work like 2 Saturdays a year and my team is II ranked and the highest regarded on the floor.

II is King, don't let anybody talk you out of that. Starmine, Greenwhich, WSJ, etc. are all secondary. Their still important but you want to focus on the II.

As a covering analyst you’re going to spend 50% of your time just talking to clients through the phone, on site or through non deal road shows.

For a junior it is 100% randomness. I have spent days where all I have done is read industry primers and went on deal books to an all nighter because we were vetting a deal but for the most part it is 7-7.

I'm London based so my answers are skewed but it's pretty much expected that you'll be covering at least one stock by the end of your second year. In the US, this wouldn't happen till not at least 4 years in for the vast majority of teams.

 

Just FYI: I finally landed a junior ER gig at a prestigious MM firm.

I am very happy getting the position even though the salary base is less than what others have claimed to receive.

Follow me on Twitter: https://twitter.com/_KarateBoy_
 

I was wondering if anyone would know the hours for HOng Kong. I know one guy from london said hours are generally 7 to 7, but I also heard Hong Kong hours can put US and UK to shame. I was wondering what the hours would be.

 

What would the hours be like for an Associate Assistant if anyone has any experience with that role. (had an interview where the guy said first one in last one out, is he referring to 7-7 as well or more like banking hours).

Just to clarify my personal opinion before someone gets pissy about the associate assistant position on the hierarchy. I've been told that some firms hire Research Associate Assistants (the bottom bottom of research). Although this is probably not a popular term/position at a lot of places, they do exist at some medium sized boutiques.

 

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