How Do Analysts at A&M Make $250K+ TC?
How's that possible, and is that relatively common? Also, why do they get paid that much, bc I don't think even IB analysts make that much a year.
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Bump
Feel like RX Consulting comp is one of the mythological things on this site. There's been a couple posts over the years how it can basically be IB to even better if you get on a good project that drives up your billables, but evidently not enough of the A&M/Alix/FTI folk peruse WSO because there really isn't that many data points on here about it
Yeah I know that it's unlikely the comp is a lie bc it's well documented across WSO, and a bunch of other forums, but I'm struggling to wrap my head around 1) what work justifies that high of comp and 2) how on earth the bonuses are calculated, bc based on what I'm aware of the base pay is a not-insignificant discount to IB, even at A&M. Makes the TC amounts even more eye watering imo. I've heard of 300k+ on a good year which I can't even imagine as a 1st yr in IB
Its billable hours and a more classic "partnership culture" that results in better comp for juniors.
Bump, curious abt this as well
I think its a mix of
That's a fair point. I do know that many of the RX consulting firms pay a lot, especially the more niche ones. FTI is the exception that it pays slightly less than "street". I'm more so curious about how A&M gets these astronomical bonuses, which are almost borderline unbelievable, bc the other RX consulting firms have a high base and reasonable bonuses.
bump
$250k for a first year is very possible, though I would not say it's common. Based off of my own billing rate and the percentage I got of billable, I would not have had to work 60 hours a week to hit that figure in TC. The thing is, it's also very possible for you to average fewer than 40 hours a week in a year, so in that year, you'd make signifcantly less than IB (though your quality of life will be way better)
Could you elaborate on how exactly you get that TC though, as in the percentage of billable / comp structure? Also, how could you average less than 40 hrs / week in a year, that's less than even most corp finc roles
So I have a billing rate, which is public for all bankruptcies, you can see it in our filed fee applications, and you can see the range our analysts bill. We then get a percentage of that as our TC, a portion of which is paid throughout the year as a salary and the excess is paid through a bonus. Of course, if you don't get enough billable in a year to go over your salary, you get a small discretionary bonus. Apologies, but I'm not sure if I'm allowed to reveal exact percentages so I won't do so. As to how you could bill less than 40 hours per week, it comes down to the deal. If the firm is just not that busy, such as the second half of 2024, you'll spend a lot of time on the beach with no deal and no billable. Or if you're on a deal and doing a boring work stream such as MORs or fee applications.
Someone correct me if I'm wrong, but I believe the reason is bc they've got an uncapped modified OT structure, so something like if you bill 1800 hours a year at $425, as an analyst, with like $89k base, your bonus is 1800*425*.20 (your share of the revenue) - 89k, so $64k. Add that to ur base of 89 and you're already at 153k for around 30 hrs of working per week. Pretty sweet
This is correct
Do you know what the ballpark share % is for associates, senior associates, and directors?
If 20% is the common share% for an analyst, I would assume it might be something like 25% for an associate, 30% for a senior associate, and so on. But maybe I am mistaken.
Not quite. Analysts are 20-25%, associates are around 20-30%, directors are closer to 40%, and SAs are closer to 35%. Keep in mind that the amount you get billed at increases, so even if you get the same cut of the pie as an analyst vs associate, as an associate you've got a bigger pie so bigger comp. Generally though associates are closer to the 30% than the 20%. Have seen associates pretty reliably clear 500k
As someone who has received offers from A&M multiple times, I can say that the vast majority of their analysts are not year 0 experience wise (meaning they are not straight out of UG). Usually their analysts have multiple years of experience elsewhere first.
They tried demoting me multiple positions both times they tried recruiting. At first I thought it was crazy to take a position discount and rejected them both times; however, my coworkers ended up accepting those demotions and jumping (for A&M rx prestige and potential pay if their billables are high).
Are their billables usually high? Seems kind of a disproportional risk if you get in expecting billables to be high but it ends up not
What prior experience did you have to get recruited / get an offer?
Not OP but generally no perfect fit, have seen credit, B4 FDD / TAS / Audit backgrounds, as well as FP&A and IB. Unlike some other finance careers, there's no guaranteed feeder career, since it's a pretty specialized skillset.
I'm not entirely sure whether that's still the case. All the analysts in my office are from UG.
Hey, if you have time do u think you could dm me. I'm UG and interested in learning more about RX consulting if you'd be willing to connect.
In Germany at least, you can’t join A&M as a grad (even with a masters) but you need to work for 2-3 years and the can switch
That would explain the high pay
The justification for the comp is pretty simple. They billed enough hours throughout the year (i.e., generated enough fee revenue) to warrant the comp. As others have said, its pretty simple and all based on a fairly transparent comp structure.
My experience with Alvarez & Marsal was brief and on a building and business going through foreclosure and the owners declared bankruptcy. The BK trustee hired A&M to prepare Debtor in Possession financials (CPA background is helpful; also a lot of nitty gritty work like approving essential expenses which takes some judgement). Originally, A&M was there with a turnaround in mind, however, the direction became wanting to sell the business (and that A&M was expensive), so they replaced A&M with a smaller company.
The sellers were able to find a buyer and they actually repaid debt and had some money leftover (partners were fighting; I helped them settle). It was a good outcome.
Bankruptcy is expensive. You got the lawyers, BK trustee fees, lender fees, and then a third party to do the DIP financials. All these parties get paid before the creditors, so they are secured. In a turnaround scenario, the owners are trying to avoid losing the business and pay a firm like A&M as their last ditch effort to save themselves. The BK process allows for some time to do this, all while cash is being used for the turnaround instead of paying directly to creditors. For bigger businesses, the cost to pay an A&M is small compared to the loss of the business.
They get paid a lot. Trustees get paid a lot. There is some kind of BK ecosystem based on debtor desperation, creditor collateral, a small industry, BK laws that afford this avenue. Top it off, for specialty businesses (ie health care), more judgement is needed as they are making decisions that include running the business and being knowledgeable of regulations. Environment can be more hostile/volatile than in a going concern.
Crazy story, but I got involved while working minimum wage line position in the business (previously I was unemployed from corporate and working on starting my own company in that field) and caught wind of the BK. My finance background came in handy, and I was able to get some good consulting work out of it. Learned a lot.
when your company is in crisis engaging advisors is not optional so you're ready to pay whatever it takes to save it
meanwhile engaging a bank for an M&A feels like throwing a bone or doing some philantropy for Zimbabwean kids
p.s. also, you make it sound like "how they dare pay more to other professionals rather than IBankers!!11; don't they know we're the BSD?!!!!?!??!!11"
Yea it might've come across that way, and I guess that was partly the intention, bc looking at IB (take RX IB for ex), I've always been told / heard that they work like 90-100 hour weeks in order to get paid the amounts they get paid, but then you have the RX consultants, who work less but get paid more (in $$ per hr or something like that). Was just trying to figure out why.
Dude, look at the fees of A&M vs PJT/Houlihan/Evercore. A&M RX fees are nearly 10X every RX IB, and (being that banks run leaner) fees/person would still be 2-5X any of the top RX banks. Per Octus’s YTD RX fee report, A&M has earned 407M approved fees compared to PJT (the highest earning RX IB) with 60M. Houlihan has 46M YTD. This isn’t every RX Consulting firm - just A&M. It’s a very unique comp model that the company can afford and, because of their reputation in the Rx space, can win a vast majority of the top deals, in-court and out-of-court.
First part of your comment is true, but for the second part, it's not just A&M that pays this type of comp. Back in Analyst days, used to have a roommate who worked in Alix TRS, his TC ranged between 160-250k, usually on the higher end. Used to take us all out to dinner once that bonus hit.
But the point is, aside from FTI, there's a very fair amount of RX consulting firms that pay really well. A&M just pays better than even them.
You’re right. Top Boutiques and Alix/FTI RX definitely can pay a premium to MBB and some probably even match/beat IB. I don’t have that much color into the RX CO space, but I was more just hitting on the point that, regardless your opinion on Consulting vs. IB, A&M is one of the biggest names in the Rx space period, and I was just confused y OP was so shocked to learn about their comp.
In terms of name recognition and prestige, where would you rank A&M RX, compared to the PJTs and Evercores? Is it pretty 1 to 1 or are the consultants discounted?
I'd say that in the restructuring world atleast, anyone who knows what / who PJT and Evercore are would know who A&M is.
I mean, it’s hard to say that A&M RX is “more prestigious” than Evercore/HL/PJT RX, especially to the Harvard/Stanford/Yale graduates of world, where the hardos are grinding networking and IB/RX technicals before taking their first finance/econ class, but I think this absolutely had to do with the fact that the top ivy’s don’t have solidified pipelines into A&M RX like they do with the banks. Because Alix/A&M don’t typically hire from undergrad, it’s just simply not as well known a career path as IB coming out of undergrad, and RX consulting is unique in the fact that they don’t care nearly as much about individual prestige when making hiring decisions, unlike top banks/MBB. I’ve also heard that the consultants play second fiddle to the bankers and lawyers in a RX engagement. This may or may not be true, but I think in terms of name recognition, compensation, and non-PE exits, A&M Rx vs. PJT/HL RX, is likely a 1:1 comparison. In terms of just general industry prestige, I’d say RX Consulting “prestige” is somewhere in between MBB and IB, however you want to decipher that. With all that said, “prestige” is the most subjective variable, and this is all just my opinion. I would also advise to always choose a career you find most fulfilling and to always put the prestige factor in the rear view when pursuing a career.
I will add on to this "second fiddle" situation, it's just not true. I've worked extremely closely with the RX consultants, and the truth is that the pecking order depends a lot on what type of bankruptcy (in vs out of court) and the stage.
Focusing on the in court ones, because those are considered more high profile, restructuring consultants often “run the case” operationally and in court filings, while the bankers “run the deal” strategically and in negotiations. Neither strictly plays second fiddle,they lead different parts of the orchestra, going with the musical analogy.
For a little bit more detail, consider the stages of a bankruptcy. You've got
So really, it's a relay race, not a who's better than whom situation.
you have lots of advisory groups/constituencies involved in bankruptcy (lawyers, accountants, bankers, consultants, etc.) that play very important roles in their areas, and the involvement of each varies depending on the situation/complexity/causes of the distress, so there is no reason on why bankers should be paid prima facie more than consultants if consultants for example spent more time working for the firm.
I can also think that you only have 3 go-to turnaround consulting firms (A&M/Alix/FTI) vs. 40 banks/boutiques that do debt restructuring, so they probably have a more stable pipeline of engagements which keeps their employees busy billing constantly vs. RX guys which might spend time also pitching/monitoring firms that might need their services without having any active deal.
restructuring firms are also very focused solely on capital structure, so they are called to do a a once in a while event i.e., renegotiate/restructuring the liabilities. But consulting firms have a wider monitoring/assistance type of services for different payable /cash flows challenges/concerns by the C-Suite, so they can be engaged by firms way before the firm is in distress, which allows them to work much more on revenue-generating activities + if they end up preventing the distress it makes rx groups starve while they got paid
Can confirm, know a couple of analysts who crossed the $310k mark on good / very good years, at traditionally well utilized offices
Just came across this and wanted to level set a little. For context, was at A&M RX for a couple of years before moving out. Your compensation in their RX group depends a lot on your utilization / staffing; they pay you proportional to the hours you work. So if you aren't billing you won't be making $250k, but you also aren't really working so that opens your schedule up a lot to do whatever you want more or less.
With that being said, I valued my WLB a fair amount but also wanted to work hard too, and as such, the most I made in a year as an analyst was slightly over $300k I believe. This was during a very busy / hectic bankruptcy where the entire team was working more than usual, and A&M being A&M, demands perfection (or close to it) in deliverables.
All this to say it's entirely possible to blow through $250k as an analyst, but it depends on your staffing. You could make measurably less, or more.
Happy to elaborate.
incoming at a&m. could you please elaborate? also, would be grateful if you could give advice on being a top analyst and beyond, etc. how to get staffed on more cases?
are you currently in HF? would be grateful if could PM for more advice/pointers.
I mean what exactly do you want me to elaborate on? Your comp is a pretty straightforward function of the hours billed x billing rate x revenue share percentage. Revenue share percentage is more or less out of your hands, and billing rate is set, so if you want more comp, bill more (legitimate hours of course, don't fake your hours, you do NOT want to get caught doing that).
Getting staffed is out of your control, I'm being serious when i say that even senior people have very little say on who gets staffed on what / when. Just communicate that you're available to be staffed, that's all you can do. If the firm's having a slow year, it'll take longer, if it's busy, you'll be staffed fast. Know a few analysts who were not staffed for the better part of a year, if that happens go visit a new state or something, the boredom sucks.
There aren't buckets like in IB, so not sure what you mean by a 'top' analyst. The most simple way to be a good analyst though is just do what you're told. If someone tells you to do something, do it exactly the way they said, not how you imagine it should be. If you don't, 90% of the time, you'll just end up redoing it to match the way they want, and make them unhappy along the way. Of course even after doing it the way they want they'll end up deciding they now want it done differently, and you end up revising it regardless. That doesn't matter, it's far better to have the catalyst of a change be them rather than you. Biggest mistake analysts make is thinking they know better. Sometimes they do know better, but 90% of the time they don't, so think twice before speaking.
Once you get more senior, you can dictate how you want things to be done. However as an analyst, you're at the bottom of the totem pole.
As for the HF question, yes and no. Yes I'm in HF, but it's a tiny firm that just started. No 'prestige' whatsoever. I just joined because I wanted to do a little more entrepreneurial activity. Comp is measurably worse than at A&M. Just hoping this pays off in the future.
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