Do all IB sectors pay the same?
Take, for example, the top two teams in P&U and Technology/Software. I imagine, given that P&U companies are much more mature than technology companies, that the total annual deal value of the P&U team will generally be higher than that of the technology team. Does this mean that fees will automatically be higher in P&U? And salaries as well?
More generally, are there any sectors that are known to pay better or less in Investment Banking?
I did have some proprietary insight into this years ago. It depends on the type of institution and team.
Generally at large banks, total comp across groups is more “equalized” and “communal” to account for different industry dynamics. What I mean by that is: if fee volume in TMT is 75% higher than say Agriculture (due to TMT just being a hotter sector for M&A activity), that doesn’t necessarily mean bonus in TMT will also be 75% higher. There’s an equalizing process such that, at least at the Analyst/Associate level, there won’t be a huge discrepancy in pay. HR and Heads of IBD do this for talent retention purposes: just imagine what would happen if one group consistently got paid significantly more - it’d be hard for that group to attract and retain talent (and it’d be difficult for staffers to find eager juniors too - who wants to work on deals for a low paying group?)
At boutique firms, it’s a wider range of practices. One Senior MD I knew personally has a “eat what you kill” type of contract: he collects a direct % of his annual fee volume for his group and has a reasonable degree of discretion on how to split it amongst his team members. So in that instance, if your MD had a killer year, you will be compensated very well.
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