Does pnl % of comp exist at market makers

Based on previous WSO threads, here are some insights regarding compensation and bonuses for researchers and traders on a market-making desk:

1. Performance-Based Bonuses:

   • Bonuses are often linked to performance, but not necessarily as a fixed percentage of PnL.
   • Compensation can be highly discretionary and influenced by various factors, including team performance and individual contributions.

2. Percentage of PnL:

   • It is rare for junior traders to receive a percentage of their book's PnL. This is typically reserved for more senior roles or exceptional performers.
   • At some firms, senior analysts or desk heads might have a percentage of PnL, but this is not common and often not explicitly stated in contracts.

3. Discretionary Nature:

   • Bonuses at banks and market-making firms are often discretionary and can be influenced by the overall performance of the team or desk.
   • Even if an individual has a strong performance, their bonus might be affected by the broader financial results of their team or firm.

4. Market Makers Specifics:

   • At market makers, systematic PnL cuts for analysts are not common. Citadel is one of the few exceptions where such structures might exist, but even there, it comes with many nuances.
   • Senior analysts with significant experience and consistent performance might reach seven-figure compensation, but this is not the norm and usually requires substantial experience and proven track records.

In summary, while performance and PnL are important factors in determining bonuses, the structure is often discretionary and varies significantly across firms and roles.

Sources: How PWM really works (part 1): past, present, future, and $$$, https://www.wallstreetoasis.com/forum/trading/compensation-at-oil-majors-and-physical-houses-for-traffic-desk-and-traders?customgpt=1, https://www.wallstreetoasis.com/forums/mm-analyst-comp?customgpt=1, 2019/2020 Sales & Trading Bonus Discussion, Reflections from year 4 as an equity analyst