You’re at a hybrid SM/MM (think Viking). Pnl of the pod is $300m. 3 analysts, 1PM. Analysts are 5-8YOE. What’s comp expectation for the analyst? Assume equal contribution across all analysts. Do you expect comp to grow linear with pnl?
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Based on the most helpful WSO content, here's what you need to know:
Comp Expectation for Analysts: At a hybrid SM/MM with a $300M PnL and 3 analysts (5-8 years of experience), comp for analysts would likely fall in the $1M-$2M range in a good year. This assumes equal contribution across analysts and a typical payout structure where analysts receive a percentage of the PnL pool.
Linear Growth with PnL: Compensation does not grow linearly with PnL. As PnL increases, the percentage allocated to analysts and the team may decrease due to firm-level considerations, such as higher firm overhead, reinvestment needs, or PM discretion. For example, while a $300M PnL might result in $1M-$2M for analysts, a $600M PnL might not necessarily double their comp.
Factors Influencing Comp:
In summary, analysts in this setup can expect strong comp, but growth in PnL won't always translate to proportional increases in pay.
Sources: https://www.wallstreetoasis.com/forums/mm-analyst-comp?customgpt=1, Citadel Equities analyst terms, HF Distribution of outcomes - by mid-30s, 2020 bonuses, Performance of the best PM’s at MM’s?
Really depends on your pm’s deal with the firm. Say Marshall Wace type where the cut is HSD to 10%, bonus pool for the team is ~$30m. Without knowing whose sub-book/coverage made most money, the pm would take $20m or little more analysts prob can take $3m each. Again hard to say without knowing dynamics.
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