How much to ask?
Joined big 4 MM after a year in IB. First 2 years I was learning and ramping, and was paid +100% base for both.
Started to take more responsibility/initiatives myself this year. Team is up ~10%, which is great, and pnl from my coverage is about $25m. I don’t trade but basically told my pm what, when, how to do and he executed most of the times.
I’m aware HSD ~ 10% is junior PM economics, which I don’t have that in my contract, and certainly not expecting the high end of the range, but where should I set my expectation at going into year end review?
What is rough P&L total for the team?
I would expect about 1mm, maybe goes to 1.5-2mm if your team is clearing a lot outside of you.
~$70m is my understanding. I don’t know exact payout between my pm and the firm. We have pm, one senior analyst (I don’t report to him, and no coverage overlap), one junior from our grad program just joined.
1-1.5 sounds like your range
$1m total comp seems to be a reasonable baseline expectation, hope for a bit on top
lots of PMs dont like to pay jrs above this hurdle for whatever reason ("psych resistance"? lol) so even though you can make an argument of closer to 1.5m (~5% of your pnl) it might not happen
if its under $1m and your contribution is truly as you described (full coverage on your own/no senior guy above you, pm not too involved in the names and followed your lead) you should be upset and leave
As above, there’s one senior guy and another junior on the team, but no overlap in coverage.
My pm is a really nice guy and I don’t mind getting underpaid a little to stay with him. Still sounds like below a million, I should be upset with?
70m pnl means ~15m to spread around, deduct some misc expenses - assuming theres no drawdowns and losses to cover
your pm can have a nice 10m-12m payday and still pay you a buck and the senior 2 - 3 bucks
if hes paying you less than that id think its worth having a direct convo w/ him to hear his reasoning to see if it holds up
I highly doubt a PM will accept to increase your bonus from 150k to 1m yoy. Never heard of such a jump at a junior level. I would bet on 500k
You guys are delusional lol. There is zero shot OP is going to get paid $1M during his 3rd year on the buyside at like age 25. $500k is the ceiling expectation here if last two years were $250k (assuming base is $125k). Senior prob gets $1-1.5M range depending on YOE. Yes that means the PM is greedy and will take the entire rest of the bonus pool. You don’t get paid what you think you’re “worth” at such a young age bc you nearly always overestimate your contribution to the team to begin with. You get paid what you can command elsewhere on the job market, which is generally $350-400k with 2 years IB + 2 YOE
Yeah that is not how a big 4 MM pod operates in today's talent market... this isn't some PE role where you can apply a grid of 1 year IB + 3 years Buyside, and figure a 350-400k comp bracket for this analyst and call it a day. Put yourself in the PMs shoes and let's say we do what you said, bonus the senior 1.25mm, set junior TC at 375k, and bank ~12mm ourselves.
First realize that +10% with ~70mm P&L is very solid for running that lean (team size of effectively 3) and the pod is likely on the radar for BD at other platforms. They are asking did our guy do the same, and if not how do we acquire that P&L stream / delete it from our competitor.
If we comp the junior 375k on 25mm of coverage P&L and have given them runway to do their own work, junior divides and thinks that is 1.5% of P&L. They ask to switch to formulaic pay next year, and starts softly interviewing to see their options. In that process, other platforms are learning what we put up last year, the rough attribution by analyst, and how the bonus pool broke down. Here is the math in their heads:
Who do you think they pursue?
PMs usually elect to allocate 10-20% more of team payout to analysts and make these problems go away. More effective to use the goodwill we earned with management to expand the mandate and grow the team (ultimately raising our market value) vs. spending the next 6 months understaffed and training replacements, with a reputation for high churn.
Comp in this industry is closer to what you are saying when team size is larger with more hierarchy, so attribution isn't clear (both internally and to a competitor), and there is a more established process for replacing people.
Not at a pod, but hopefully one day. Can you explain how BD at other firms find out about a PM’s performance if the PM is not sharing that track record with them?
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