Expected Bonus Delta for BB/EB
What are your thoughts on the difference between aso bonus delta? I am thinking that it will be larger than past years, a trend which is likely to continue as BBs focus on cutting costs, while EBs seem to be holding up better. Just my 2 cents.
Comments (6)
At the junior levels, it wont be larger delta in my opinion.
EBs pay analysts/associates as much as they need to so they can get the best junior talent. If the industry is down, everyone's paying less no matter if your particular firm was more insulated from the drop in deal flow. As long as they pay a material amount more (current delta), they will probably still get the laterals and talent they need.
The only dynamic next twelve months is if revenue-generating MDs get stiffed, EBs will likely look to poach without needing to put out insane packages that they needed to last couple years.
From a pure Revenue x Comp Ratio % standpoint, would expect it to be significant given where EB revenues stand YTD. On the flip side, stingier EB mgmt teams may just choose to pay the normal delta above BB pay, with the latter expected to be down significantly. FT/ BBG reporting JPM, C and BoFA will see 30%+ cuts to the bonus pool, GS S&T revenue will be spread around to keep bankers happy + they sacked a bunch of people so less mouths to feed, MS was very cheap in 2021 can't imagine what this year will look like without 10%+ cuts to their IBD headcount
Last year as an associate, my EB total comp was over 100k more than top bucket BB money at most banks (excl GS last year which was anomalous and in line with what I was paid)
Having worked at both BB and EB, I would say the difference is effectively 1 year of comp. If you're an associate 2 at a BB (i.e., been on the job for 18 months), you should expect 75-125% of your base as bonus, and at an EB at the same level, you should expect 125-175%.
All in, if at a BB your base is $175k, you should make around $350k all in, while at an EB if your base is $175k, you should make around $425k all in
I also realize that i'm probably dating myself by not adjusting for the recent shifts in base salary
The way to think of it is more or less 1 year of comp. If an associate 2 at a BB gets comp'd $350k, the associate 2 at an EB will likely get $425-$450k at an EB. Obviously this is highly dependent on group/industry/product/foucs etc, but i think that's a decent rule of thumb. Also, many EBs pay all cash, but that's not necessarily true at a lot of the well known EBs (EVR, PJT, Moelis etc). Would say that this is a pretty decent guide all the way through junior MD, but at that point the EBs will hang their junior MDs up much more on relative revenue generation whereas BBs acknowledge that the firm makes the money. Super interesting dynamic
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