Managing Director comp % of deal fees

Dad was an MD at a BB back in 2014-2015 so maybe things have changed but thought I’d share what he told me.

Generally there’s no written formula for what % you collect. The days of getting a certain percentage are gone; that’s all pre-financial crisis stuff. You used to see traders negotiating contracts but that doesn’t happen anymore. VPs, directors, and MDs all have a target of how much revenue they’re support to collect. For MDs, it’s like $25m/year. At the end of the year your boss will look at the PnL statement attached to your name (also league tables etc.) and if you bring in less than $20m then there’s some decent chance you’ll get axed. For a general coverage or product MD in a okay year they’ll prob get around a $1-3m bonus. Banks don’t feel the need to pay more than they need to. For example, 2020 was a crazy year where banks made a ton of money. MDs prob pull in a ton of revenue but every Md on the street did so it’s not like you’ll get paid exceptionally. Occasionally you’ll see MDs negotiate for a guaranteed first year bonus of $5-6m if a bank is trying to convince them to switch banks.