Incoming first year at BofA - I’ve learned that when it comes to end of the year reviews, first year and second year analysts are put in the same pool for determining ranking / bonus, and inevitably most second years get top / mid-top and first years get bottom / mid-bottom. This system makes absolutely no sense to me - why would the bank not judge you against your actual peers?? Curious to hear what it’s like at other banks.
| +404 | Evercore Intern Seizure | 62 | 59m |
| +98 | UBS IB Americas has failed, now behind Santander and Stiffel | 27 | 1h |
| +79 | JPM M&A is Gone??? Purely Coverage Banking??? | 41 | 8m |
| +60 | How do I understand vs. just memorizing? | 11 | 4h |
| +48 | Losing my personality in Banking | 9 | 1d |
| +45 | The good and bad with Wells Fargo | 12 | 3h |
| +42 | Associate & Above IB exits | 18 | 6h |
| +35 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 18 | 8h |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 13 | 3h |
| +31 | Tech to IB Pivot | 20 | 17h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Based on the most helpful WSO content, the evaluation process for first-year analysts (AN1s) can vary significantly across banks. While some banks, like Bank of America, group first-year and second-year analysts together for rankings and bonuses, others may adopt different approaches. Here's a breakdown of what you might encounter at other banks:
Separate Pools for AN1s and AN2s:
Some banks evaluate first-year analysts separately from second-year analysts. This ensures that AN1s are judged against their peers with similar levels of experience, which many consider a fairer system.
Performance-Based Rankings:
At certain firms, rankings are strictly performance-driven, regardless of tenure. This means that if a first-year analyst outperforms a second-year analyst, they could still achieve a higher ranking and bonus.
Structured Feedback and Development:
Some banks place a heavier emphasis on developmental feedback for AN1s, recognizing that they are still in the early stages of their learning curve. Bonuses and rankings might reflect this, with more leniency given to AN1s compared to AN2s.
Cultural and Firm-Specific Practices:
Banks like Goldman Sachs, Morgan Stanley, or boutique firms may have unique evaluation systems. For example, some firms might focus on team contributions, while others prioritize individual deal execution.
Mid-Year Reviews:
Many banks conduct mid-year reviews to provide AN1s with a sense of where they stand and areas for improvement. This can influence end-of-year rankings and bonuses.
Your frustration with being grouped with second-year analysts is valid, as it can feel like an uneven playing field. However, this system might be designed to push AN1s to ramp up quickly and compete at a higher level. If you're concerned, consider seeking feedback early and often to ensure you're on track to meet expectations.
Sources: Scheming IB as an Analyst, Q&A: 3rd Year Private Bank Analyst, 2023 Consolidated IB Analyst Bonuses, 1st Yr Banking Analyst Open for Questions, Key Interview Takeaways - 2nd Year Analyst Perspective
Bump
We make our analysts do the FitnessGram Pacer test. Last ones standing are top bucket
I mean it kinda does make sense. Meritocratically they are ranking the best at the analyst set of jobs, period. Naturally those who’ve been there longer should be better, but in reality that’s not always the case. If you have a first year who is a rockstar truly, they will naturally beat out the mid bucket 2nd years in terms of pay.
If you review on year by year basis, you add complexity because now do first years automatically deserve to have a bonus pool that’s slightly less than second years simply because they’ve only been here for a year? Wouldn’t that discourage any first years from working super hard for an outsized outcome? Also comparing first years against first years doesn’t give you any real baseline of performance. Comparing them directly to experienced hires of the same crop is (in theory) more fair because the bank isn’t putting any artificial premium on tenure that isn’t necessarily deserved.
And answering the natural follow up question - well wouldn’t this mean a first year performing at the level of a second year mean that they should have the second year analyst salary?
Salaries are pre emptive, you get hired for the level we expect you to perform at. Bonuses are reactive to the quality you actually delivered, and the ticket to getting the salary adjustment for the right level once you enter your second year. Keeping all analysts in the same pool allows for an easier end of year compensation adjustment based on who actually contributed the most value
This makes a very wrong assumption about finance, that it's meritocratic... It's very hard to determine merit among juniors in banking since you don't directly bring in revenue. Analysts' bonuses and ratings at every firm I have been at (variety of BBs) have basically been a political battle where the juniors that seniors like the most get the best rating. Merit only really comes into account in banking once you hit VP and have the potential for bringing in some revenue. Until then, bonuses are just going to be determined largely based on personality/how much people like you.
I can give you that for sure it’s a more fragile sense of meritocracy that is heavily influenced by politics. But I honestly chalk that up to poor metric design for non-revenue contributors more than anything. There is absolutely a way to differentiate the quality of an analyst: how often do I have to correct your mistakes/do I often get frustrated with the types of mistakes you make? How often to do you miss deadlines? Are you responsive? Have you raised your hand to take on more complex work or do things that are clearly within your wheelhouse without me needing to explicitly tell you? The hard part is that none of this objectively measured, and of course only giving feedback twice a year formally means analysts cherry pick the seniors they did the best work for and were affected by recency bias. I think that’s on the bank though for poor feedback loop design more than anything.
Idt that’s accurate at all, know multiple 1st year analysts at the bank who were top or top mid bucket. Got $75k to $70k bonuses last year.
Hopefully it’s roughly the same this year
Analysts get ranked against each other across all years 1,2, 3 and last year and the year before that all AN1 were ranked the same
1/2 of firms rank analysts across all years, and the other half will rank you relative to the analyst class. Depends on the bank and group. Ultimately, all bonus decisions are made by the group head; everything else is just window dressing, including your bonus rating.
Voluptatem ab porro in ducimus perferendis incidunt sint. Voluptatum ut commodi sit ea. Eos et nihil aut. Architecto quia saepe accusantium magni voluptatum quae. Nam debitis tempore iusto omnis consequatur. Vitae sint exercitationem rem voluptas quia enim.
Reiciendis laudantium harum quo rerum earum qui blanditiis. Illum assumenda aut quis nihil ut provident. Aut optio dolorem nihil consequatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...