IB Comp Progression
As a career banker (coverage group in NY) thought it might be helpful to start a thread on comp progression to give folks a sense as to how pay could scale if you consider IB over medium/long term. Also gives a sense as to ebbs and flows of comp at different levels in good markets and bad. Feel free to add based on your experience
An1 (2012): 70 + 50 + 10 = 130
An2 (2013) 80 + 65 = 145
An3 (2014) 90 + 90 = 180
As0 6m stub (2014) 50 + 50 + 40 = 140
As1 (2015) 140 + 185 = 325
As2 (2016) 150 + 150 = 300
VP1 (2017) 170 + 205 = 375
VP2 (2018) 175 + 300 = 475
VP3 (2019) 200 + 325 = 525
D1 (2020) 250 + 700 = 950
D2 (2021) 275 + 1,225 = 1,500
MD1 (2022) 350 + 650 = 1,000
Okay but 10 years to MD is pretty fucking impressive
People underestimate how much time they will spend in VP / Director roles and the probability that they take an industry role for a few years before circling back to IB.
Most MDs I've worked with left IB for a period and gained industry exposure (relationships mainly) that enabled them to become effective MDs in their sector.
It's not that this is essential but that it's a very consistent way of demonstrating expertise in a sector and building relationships with other executives / board members.
This could be either in an operator role or a corp dev role, with the former offering better industry knowledge and the latter offering better relationships.
Junior numbers look like they're from at least 3 years ago
No fucking shit. He listed his 10 year career- what did you expect?
Because people reading this will get the wrong idea.
Ok sorry guys I messed up
First-year in New York is 110, but lie tell your friends its 170.
Only two years as Aso? How did you pull that one off? Congrats on making the jump to MD.
Some banks promote early for high performers. Think JPM would be most common, at least in my circle
Mind sharing what kind of bank you were at?
Also was the big Director year just classic 2021 or was there some fee originating in there?
Congrats on the MD fast track btw, hoping to get there by 40…
How do you feel about vps taking an hour to eat dinner with their wife and watching some Netflix at night vs reading up on merger deals all evening?
As if Frank Quattrone or any other of the BSDs were spending all waking hours GRINDING on deals.
Certainly useful to read market info but cleverness and intuition will get you 90% of the way to being an effective advisor.
Why didn't you opt to go into the buyside / why did you stay in banking and how was the lifestyle? Is it true that some more senior MDs make 5+m on the norm yearly?
Yes. There are people all across finance that are doing this (and in HF there are people who regularly make 10+, but then there are years where they probably go down 90% given market). The people making what you're suggesting are the leaders for their groups - they have set the tone, they hold the majority of the relationships, etc. There are a lot of groups where there are two-three senior MDs that hold the relationship with the majority of clients and can dole out the work to other junior MDs. The junior MDs make 750k - 1.5, while the senior MD makes 5+ because if they left, they would take the relationship with them (if the junior MD left, someone else would get the work)
EDIT: To add to this, this is the norm in many industries, and prevalent in PE and law firms. At a good shop, "worker bee" MDs are making high 6 figures - 2m, the rainmakers with the relationships with clients or partners or investors are 5m+
What are the chances of making it to "worker bee" MD if you're good at your job and willing to grind it out?
2 years as associate and 2 years as director. Dude you must be really really good. Congrats on making MD
Just thought I'd give another set of less comprehensive data points (I left beginning of D1), given I think OP probably had a bit of noise with all of his early promotes that may have created some volatility in the numbers. I was at MS, and at least there, outside of truly atrocious years, if you were performing well you would never see a down year until you were a Director, and usually not until you were an MD (although this year even top performers had down years based on what I know of my friends that still work there).
As. 1 (2015): 150 / 110 / 260
As. 2: 175 / 125 / 300
As. 3: 200 / 225 / 425
VP 1: 250 / 275 / 525
VP 2: 250 / 350 / 600
VP 3: 250 / 475 / 725
Imagine getting a 475 bonus lmao
Congrats on the progression!
I was curious if you could speak to the change in lifestyle or hours/ increased control of your time that you noticed over the six year period.
Sure. I would say that it was a meaningful shift over time.
As a junior Associate, I was very focused on making sure I was really strong from both a modeling and slide construction perspective, both to gain credibility with the analysts who (at the time) had been there longer than me, and just because I think it is important to understand how things work from the ground up.
As I became a more seasoned Associate, I felt more comfortable delegating work to the Analyst and stepping in when it was more critical, which gave me more flexibility to arrange my schedule on a day-to-day basis, but while still having the technical skills to step in and take over workstreams directly if we got into a time crunch. Sidenote, while Analysts get frustrated about Associates delegating and checking, it's actually what Sr. Associates are told to, because it ultimately improves the work product and lets the Associate start to try and think bigger picture.
As a VP, once you start consistently having both an Associate and Analyst on a project, it really opens things up, although even then, when things go awry or your junior team isn't as strong, you might still have to step in and play frontline defense. And as alluded to above, I was very focused on making sure my technicals were strong early in my career, and even as a senior VP I prided myself on being able to do the Analyst and Associate job just as well as them if needed (you'd be amazed how much more the team is willing to take your guidance when you occasionally show them how efficiently you can do their job, and teach them how to do it more efficiently themselves).
Additionally, as I got more senior, I had more and more upward credibility - I was considered a strong performer, so my MDs pretty much entirely deferred to me on deck construction, process timing, etc... outside of very specific situations. It was really rare that I had a set of materials or a particular process approach get totally blown up by the senior team, which cut down on iteration and created a lot more efficiency. Most of my late nights on a day-to-day basis were either directly due to client requests, or having to step down and play Analyst / Associate with a weak team.
The other big shift that happens is you just realize what does and doesn't matter. When I was an Associate and I was checking a business development deck with six merger targets, I would go into the model and get really granular to make sure the assumptions were logical, the model was flowing correctly, etc... As a more senior VP, I would look at the page, I already had a working knowledge of the players in the space, and all I cared about was that the numbers were logical and explainable. So a set of basic materials that might have taken me 2 hours to review as an Associate would take about 15 minutes as a VP. With this free time, you're able to focus on higher impact client interaction and live deals, and if you're not on a live deal, it created a lot more time to live life.
The big countervailing factor was that as I became a more senior VP, I had to travel for client meetings much more often, and my coverage group had clients all over the country, so I was flying very frequently (probably traveling on average 2 days a week, but in practice it was much lumpier with some weeks of no travel and some weeks of 3 different trips). COVID put a stop to that for my VP3 year, but otherwise would have had a ton of travel. That only gets worse as an MD, and it is actually a big part of the reason that I left banking.
Anyway, your mileage may vary, different groups have different cultures, etc... but I'd say by the time I was a VP3, I had a ton of control over my time, most of the time, outside of really intense live deals which would probably happen once or twice a year, but it was going to get worse as a Director and MD (once COVID subsided) because of the velocity of travel.
Ok I'm stupid can someone explain how to read this. Why's there 3 numbers?
Base / Bonus / Total
Cmon buddy. You say you work in banking. Have a think now…
This guy shits on anyone who works in banking but shows momentary mental lapses
Can someone please explain what happened in 2014 please? I am right in interpreting op: 3rd year analyst for half a year and then associate for half a year?
Edit: OP (or anyone who knows), is it possible to drop in your median hours worked for each year? I was hoping to gauge how much hours worked varies with position
analyst programs run summer to summer. his third year as an analyst ended in the summer and then was an associate for the remaining ~6 months.
Great insight, thanks for sharing
Guys who shared their comp progression, would you mind also sharing your net savings?
At the time that I left banking in early 2021, which is probably most relevant to your question, I was 31 and I had net assets of around $900k including retirement accounts ($320k of that was in retirement accounts). That doesn't capture whatever tax liability I had on underwithholding of my bonus. The other point to note is that I finished graduate school with around $250k in debt so the first few years of my career were pretty heavily focused on paying that down.
Today, after a couple of years in PE, I have around $850k in net assets. I took a very big pay cut to leave banking from a cash perspective. That number should be much higher but I currently have net non-index fund losses of around $64k. $34k was in individual stock investments since I left banking, and another $30k was buying put options at the COVID bottom. There's a reason you should strictly cap the percentage of your net worth that you put into bespoke positions!
Finally, while I would not ever recommend counting it as part of your net savings, since part of the calculus for leaving banking and going to PE was the carry, I'll quote some numbers there. I have been granted around $7.5m of carry DAW (assuming 2x fund performance), of which $625k has vested (much lower because of fund timing for those grants).
Hope that's helpful.
How did you make the transition from IB VP3 to PE? From what I've read, its tough to make the transition even as an A2A associate and really hard for MBA associates, let alone VPs and higher.
What do you mean about your taxes on your bonus being under withheld? Just seeing if that was simply a side comment or a mention towards some kind of tax hack…
Thanks for this, insightful!
Best of luck to you on your PE journey
~2.8m brokerage acct
~700k unvested deferred comp (pre tax)
~1.1m in real estate against 300k mortgage
Invested virtually all money since first analyst year in equities during what has been a 10+ year bull market (until last year). Was also fortunate to start career with zero debt
Nice, congrats man
Thank you - congrats on 2021
Would also be helpful for folks to discuss any vesting requirements and cash / equity splits as well
21.5 years in IB
Analyst (1-3): average of 115k. NY
Associate (3-6.5): average of 375k. London
VP (6.5 to 9.5): average of 700k. London and HK
D (9.5 to 13.5): average of 800k. NY
Regular MD: (13.5 to 17.5): average of 2mm. London and NY
Global Head (17.5 to 21.5): average of 5mm. NY
goes to show what a long slog IB can be
Congrats on your success! What would you say are your tips on those who one day wish to make MD?
What is your net worth? Do you plan to go to the buyside later on?
How were you able to maintain your stamina for such a long period?
Thanks so much for sharing.
Can you adjust those earnings for alimony payments and asset divestment due to multiple divorces? Trying to plan for the future. Thanks.
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