Pay at MMs during flat year
Hey guys - at my second year at one of the large pods working under a senior PM. We are coming up to our FY end and flat on the year and have been pretty demoralized with the prospect of making just my base. For what it’s worth this is my first year taking risk and I am slightly up on the year.
How does pay work in these years? My expectations are obviously not high but can I expect something? I’ve gotten well below 100k the past two years (so every year on the buyside) and may rage quit the buyside for BD or something if this happens again. Not trying to sound entitled but the stress of this job is not worth ~$200k year TC year in and year out.
Thanks in advance
Dm Me
sorry to hear. did you have a negotiated payout based on your pnl? if not may need to depend on the kindness of PM and a conversation you two should have separately
I do not…..
Not sure if talking to him would be the best look but overall just not sure how to approach / think about this. I’m not expecting a great payday by any means but $60k or something would be tough. That’s like $20 after taxes and deferred. FWIW I don’t think he/she is a cheap person and I’ve gotten good feedback
I don't work at a multi so can't speak to how the economics will shake out but if you only got 100k last year as well (assuming you were there the full FY) it would suggest that the returns weren't stellar last year either and maybe you just work for a bad PM?
If you enjoy the work, it may make sense to shop around and see if some other multi (or SM) is hiring for coverage before leaving the industry.
They were solid, our team had netting issues so kind of unique situation
Team returns were solid but firm had a netting issue? That doesn't happen in a MM. Or did most of team have a good year and one of the sub-books was awful?
Fwiw I was in a situation where I had a great year and team was flat, but the PM negotiated a bonus for me which was netted out of his PnL the subsequent year. Unfortunately, the bonus was less than I would have made based on my formula, but I was expecting a zero so was ok with it.
mentally prepare for a zero and a "we'll get them next year" convo. reality is that he may give you a small discretionary if he sees you put up some P&L (PM would eat the expense). Buuuut since you're relatively junior, it's kind of up in the air on whether the PM will give you anything at all and decide to pay you out of his pocket.
Getting a zero or a tiny bonus sucks, but look at the upside, you're still employed and the team is still running / has the nod from the firm. That's way more important than getting a tiny / zero bonus for a couple of years. Marathon not a sprint. Always someone doing worse. There are people that join a pod and pm gets blown up in a year (zero bonus)--> analyst joins a new pod, rebuilds models, busts butt all year to make minimal because you're not really contributing year one since you need to get infra/models going. Year 2 and bam, pm blows up. Rinse repeat a third time and then analyst leaves industry after several years with nothing to show for it and no real transferable skills. THIS IS MORE COMMON THAN PEOPLE THINK. Few people make it in industry 10 years (compare to PE). Lots of luck involved.
Thanks. Wouldn’t a zero say something about my job stability here? I.E. Isn’t there typically a “reserve” PMs can use to comp their teams and make sure everyone doesn’t leave in years like this? Should I take a zero as a sign I should switch roles? I would strongly prefer to take my base on garden leave then grinding 70 hours a week.
Instead of fixating on whether you're getting a 50 or 100k bonus, you should be focusing on your risk taking and building the necessary skills to take the next step and becoming a PM. The fact that your PM is letting you take risk is a much more beneficial thing to your career than getting an extra 50k. Your discounted earnings down the line if you can make the jump successfully will way outweigh whatever bonus you get this year. Expect 0 - if you can't take the stress and long hours then this is the wrong industry for you. That is literally what we get paid for.
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