There’s good debate in the BofA comp thread that warrants some discussion. There have been a few threads the past couple years from pissed off employees at BofA (rightfully so) discussing the falloff at BofA, and I think the below captures it well. What do people think? The counter argument is that BofA has grown its share over the past couple years, which is honestly impressive that they’ve been able to do this while paying their people like garbage. However, this ignores profitability metrics and I wouldn’t be surprised if BofA has 8x the MDs as some of their competitors.
It seems like the MDs are aware of these issues, but are afraid to bring it up to very senior leadership/the schoolyard bullies. Some of the greatest hits below.
“Lots of people say BofA does not care about its investment bank. I don’t totally agree with this statement. The bank has made efforts to grow its footprint in IB the past few years - the problem is the execution has been very poor. In order to grow effectively, banks need to be careful about who they hire and bring in MDs of high quality. You can’t just funnel in all of the morons from coverage into a new group and call it EGRC. The bank sacrificed quality and instead focused on putting butts in seats and plug & play. Maybe the bank views this as a viable strategy, I’ve seen the argument that the large banks’ successes are moreso due to the brand and balance sheet. But, as a mid level interested in a career IB I do not want to be at a place that does not care about my development and views me as a butt in a seat.
This poor growth execution of course drags down overall efficiency, since revenue per MD declines, and as a result there is less bonus money to spread around. This frustrates the employees, particularly those that have pulled their weight, so they lateral somewhere where they get paid. This causes good performers to leave and bad performers to stay (since they lack attractiveness on the open market), hollowing out the talent pipeline.
The bank refuses to fire when the situation calls for it. Almost every bank overhired in their Tech and C&R groups in the 2021 period, and almost every bank backtracked and laid off the weakest swimmers a few years later. BofA is the only bank that did not do this, and now these teams have a million associates with little to no deal reps. They won’t get fired and they also won’t leave (because they can’t), and they’re not getting paid. Not a good recipe for a well functioning team.
UBS apologist deflecting, nice try undercover UBS MD!
(Also way too long, not reading all that gibberish)
Falling off would imply they were ever on top lmao.
Top 4 Bank is top I would say
In what world are they top 4. No one thinks of them ahead of GS/MS/JPM or any of the boutiques besides maybe GHL and Guggenheim
thanks for the insight here and definitely agree.
Though this phenomenon is not really isolated to BofA, the growing market share and fees and declining compensation and treatment is emblematic of the commoditization of banking as a service for bulge brackets.
Both on A: the talent front- more and more people can easily and accessibly break into the industry with proper interview prep, giving employers an edge
B: less bespoke solutions offered by banks and regulations having changed the game to where banks can no longer seek as much profit as they used to.
Believe this similar phenomenon is happening at Barc, Citi, UBS, Deutsche - essentially the "other" BBs.
WSO does not believe UBS is a BB anymore:
https://www.wallstreetoasis.com/forum/investment-banking/ubs-the-bulge-…
This is silly. They've grown market share and profitability meaningfully. Think all the things you mention really prove is that junior employees don't add nearly as much value as they think they do and not surprisingly are not good at evaluating what how good an MD is.
Toxic VP mentality.
You'd be nowhere without the grunts under you doing work while you glaze your MDs behind.
Cut them some slack. Does it come from the top? Yes as revenue always has and will.
Is that an excuse to tell juniors theyre worthless? No.
Youre probably just about as worthless to the firm as they are, sorry bud
The problem with your statement is that its not like BofA has just dogged junior bankers in pay. It hit everyone at every level with pay. You know how many top MDs left last year because they got sick of it? Where did all the good TMT MDs vanish to the year before?
Analysts still get good pay, it’s after that it falls by 20%
one went to UBS Tech
https://www.reuters.com/business/finance/ubs-plans-tmt-dealmaking-team-…
Fair point that juniors are unimportant. But
Please point me to the source stating BofA’s IB profit has improved the past couple years. Revenue I agree, but from what I hear internally profitability is a huge issue. Tons of MDs at the bank do no M&A. Considering this is the most profitable product, and these people eat up $500k per year minimum, I can’t imagine IB has been killing it in that regard. My post wasn’t intended to trash MDs at the bank - there are a lot of good ones and they are quite frankly are just as pissed off as the juniors regarding their pay.
It’s not just juniors the bank is shafting, it’s everyone. MDs did not get paid the last few years either, and a ton of good MDs in the bank’s historically strong groups left. Hell the sponsors team lost like 3/4 of its seniors last year and the team all but imploded. The firm protects analysts because they’re cheap but absolutely kills its associates - is it really that hard to scrounge up an extra $30k to pay them market value? Apparently it is, because the bank is not profitable. And don’t even get me started on VP/Ds, who got shafted the most out of any level. Directors getting paid 500k is absolutely absurd, like not even bottom of the barrel ones.
I agree juniors don’t matter as much as we think. But in the long term is it really a sustainable business model to continuously screw over your talent pipeline? Several other banks (better ones than BofA) do not operate this way, and I’d argue it’s more efficient for the bank and actually cheaper in the long to pay market value and develop from within, because you don’t need to overpay for external MDs.
question of whether you think you can retain them long term regardless. If your top people all leave regardless of pay for bigger names, then there's less incentive to pay market because you know you're going to lose the good people anyways.
GS/MS and the top EBs have significantly fewer people leave for bigger names, and have a better chance of retaining the good people Associate + so there's a lot of merit to paying market or higher to make sure you keep a strong pipeline. If your business strategy focuses on poaching those who wash out from JPM who were good but not quite good enough to make MD at JPM, you can survive without developing any in-house talent.
You live in a different galaxy if youre fantasizing about a corporate raider riding in to pay any bankers *more*.
Not pay bankers more - get rid of the bloat and lack of efficiency. This in the long run will lead to more $$$ to spread around to the folks who remain
Corporate raiders tend to despise investment bankers as a cost center. They're notoriously stingy about paying them on deals ime
Carl Icahn would absolutely make heads roll if headcount is bloated. I doubt he boosts anyone's pay very much though except for maybe a handful of proven revenue generators.
Carl Icahn launching an activist campaign for your company probably isn't good news for your near term employment prospects or earnings. Especially if you're a cost center pulling in mid-six figures at a balance sheet bank
What you're describing is literally JPM and GS, BoFA is great the way it is as a second option if you don't want to have anxiety attacks every year in perpetuity because the execs just HAVE TO layoff people.
I don't know why people are always foaming at the mouth of Bank of America becoming like that, it reminds me of boomers who want to destroy everything that doesn't provide monetary gain and why most of them are pro H1B and destroying the fabric of America and the rest of the western world.
Just let sleeping dogs lie, as a VP (ignore title) at Bank of America, I always hear this sentiment from "top bucket" masters of the universe bankers before they leave to GS and JPM, make a good living then get laid off because of some retarded belief in constantly reducing expenses and giving their entire pipeline to a someone a bit more junior who has been at the firm for longer.
Its a stupid way to run a business imo and even dumber to want to partake in it
My total comps from Analyst 2 to Assoc 3 is up like 15%
Have been top bucket every year
Really disheartening and makes me wonder I work so hard / care so much
Stockholm syndrome, mostly likely
Because you don’t have the balls to go do anything else and you’re comfortable with what you know. It’s endemic among mid-level bankers. Good luck and there’s always next year!
This is your fault. If you could've earned alot more elsewhere, sticking around this long is a borderline moral failing imo
I broadly agree, but I think you’re overstating how much BofA cares about its investment bank. It is not a strategic priority and leadership likely views it as more of a necessary evil. As long as it’s kind of humming along, the heavy hitters do not feel compelled to change anything. They’ll just keep paying below market and will keep dipping further and further down into the junior and mid level talent pool. If you are a mid level, I’d recommend leaving because the bank likely isn’t going to change its behavior anytime soon (unless there is a big overhaul in leadership or approach of the investment bank), and you aren’t going to get paid what you’re worth here.
For what it’s worth though, I do find it somewhat ridiculous that the bank paid this poorly again after getting skewered over their bonus payouts last year, and basically killing an associate on the job.
S&t has been s
"Top #3 in every product, industry and region, with a relentless drive to #1", that's Koder's mantra.
Not sure where that relentless drive will be coming from with the comp levels we've been seeing for years (apart from the few top producing bankers).
Maybe they believe that repeating this enough times will make it become a reality...
Edit: fixed typo
Del
it is worse than you think. they are okay in capital markets because they latch on to deals given the balance sheet. their M&A fees are terrible and its funny bc that is where you need more talent to win and they choose to flush the toilet of good performers and keep just the turd.
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