Bonus Beta over Time
What is the beta or magnitude of bonus amount (relative to the past year) indexed to your firms/groups performance?
Here is an example, since I'm unable to articulate it well.
Firm A is down 25% in fee generation for IBD for the past four quarters. This means that analysts should expect bonuses to be down 15%, associates down 25%, and VPs down 35% (I know that aso and VP bonuses are at different times, but let's hold that constant for now). This means that analysts would have a bonus beta of .6, aso of 1, and VPs of 1.4.
In your experience with bonuses, is this a correct way of viewing it? And what are your best guesses of bonus betas for IBD?
Shut up nerd
Are we talking levered or unlevered beta?
Analyst, Associate and VP compensation is all pretty rigid. These figures won’t be heavily impacted by y-o-y performance and remain relatively steady (within +- 0-20%) to prevent attrition.
Makes sense, but might want to tell that to JEF this year (or MS last year).
Exactly. I thought the same as the OP, but the dogshit JEF and RBC bonuses were concerning.
Small sample size though.
BMO paid well
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