I have always found that BB/EB MD comp is a bit of a black box. While it is relatively easy to calc PE comp given fund size, carry size etc. I was curious if people had either actual/anecdotal data for BB or EB IBD MDs.
For example, do all MDs clear 1mm per year? Is there a "ceiling" to comp as a BB MD. Would really appreciate any insights (even if anecdotal) into this?
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My MD cleared ~$700K last year, so I definitely would say making $1MM makes you an outlier among MDs these days
Interesting, mind sharing type of firm e.g. BB/EB, how many years of experience they have as a MD?
BB MDs average 1.5mil. Simple google search.
your MD is either on the verge of getting canned, had an extraordinarily poor year, or is not at a BB/EB.
My MD at a small M&A boutique cleared over $4m in 2019, pretty sure this is higher than what most MDs at BB/EBs earn.
Thanks for sharing! How many years of experience did your MD have
5 years experience as an MD
note: I think across the street MDs probably earn around $1m on average
I asked in an MD AMA:
https://www.wallstreetoasis.com/forums/qa-md-in-ma-and-capital-markets-…
This was a great thread.
Thanks for the helpful info! Any other data points/ anecdotal evidence? Seems like consensus is that BB MDs average $1.5mm whereas EB MDs average ~$2mm
Got it, so a head of an industry coverage group at a BB e.g. head of industrials, tech is not necessarily pulling 5-10mm annually?
Average MD: 1-3m
Rainmakers: 5-10m+ (typically 1-3 per bank in my experience)
When I was at JPM London, there was one IBD MD who was rarely seen, everyone in the team just knew his name.
He just had two really strong relationships with two of his childhood friends who are now both CEOs of two multi-billion market cap companies. Each does 1 deal per year (so 2 deals per year combined) and the execution team handles the entire transaction whilst the relationship MD goes and plays golf or drinks with the CEOs (all expensed on JPM ofc).
Apparently, he's only ever seen when he comes into the office to discuss the deals at the start with the team and then leaves during the live process and then comes back once closed to celebrate with the team (and then for the rest of the year no one hears from him or sees him, he's out enjoying life), both these deals bring in $5-10m in annual revenue for JPM and the MD gets $1m+ per year whilst not doing a single bit of work. JPM also do not pressure him and are comfortable with him doing what he does because both the clients said they will go where ever he goes so if JPM decides to fire him they'll lose a consistent $5-10m annual revenue stream. Of course, if either of these clients decides no longer to actively do transactions or if the CEOs both retire/get fired then the MD will probably be fired or retire himself, but for now, it's a pretty consistent revenue stream for JPM so they don't care.
I no longer work at JPM (I left in 2018) so if anyone reading this works in JPM London, comment below if you know who I'm talking about.
That’s actually dope for him like I’m kinda jealous. But he probably had to work somewhat hard or at least be decent to move up to MD while is friends moved up to CEO also
There are unsurprisingly a lot of variables which impact MD compensation, including firm performance, group deal flow/performance, individual P&L/performance, seniority/role, etc
I would say for a decent MD at a decent firm/group, $1.5-2.0mm is a fair assumption for average all-in compensation. There are some earning sub-$1mm (either a bad year or headed for the chopping block) and some earning much more ($3-5mm+) if they book some big fees or whether they lead a strong industry or product group.
I work at an EB and one of the primary reasons senior bankers from BB platforms join EBs is because it provides a more direct linkage between P&L and comp. Higher upside, but also higher downside. If you don't bring in any revenue, you could easily receive no bonus. Conversely, if you have a killer year, you can pull 8-figures. For example, there are some MDs I know of who have earned $20m+ in some years (and they aren't even super "high profile" guys like Ken Moelis, Jeff Raich, Blair Effron, Paul Taubman etc.)
Very interesting stuff- thank you so much for sharing. If you do not mind I had 2-3 quick questions:
1) For BBs, since they offer a variety of product options e.g. debt, equity is it safe to assume it would be a "safer" place to earn good comp i.e. in a year like this, boutique M&A groups have taken a hit while BBs have increased revenue given rescue financing etc.?
2) As a VP in an EB, do you think they are better places than BBs to get client interactions? Basically very curious as to what makes a "rainmaker" and whether they boutiques providing more client interaction opportunities give someone a better shot at becoming the proverbial "rainmaker"
Thanks a lot for your time and data. Extremley helpful information.
On point #1, i addressed a similar question in this thread: https://www.wallstreetoasis.com/forums/bb-vs-eb-total-compensation. Long story short, BBs do help offset variability in compensation for the average coverage banker because there are other products you can lean on - ECM, DCM, levfin, derivatives, etc. However, it also means more mouths to feed across the bank for every $ of revenue and you're typically held more closely to an annual budget (target revenue) than at an EB.
On point #2, it's a tough one, but I would say on balance it's better to be on a BB platform because it provides a more structured pathway to developing the industry expertise and the information flow that is crucial to carve out your own niche and originate business and not be seen as a pure execution banker for an existing rainmaker. If you're at a BB as a director or junior MD, you'll typically cover more companies in a given industry and have more touch points with a client than just M&A (i.e. not every player is super acquisitive, but every company will typically require financing at some point). There are very few high-profile "rainmakers" at the EBs who were home grown or spent 100% of their careers at independent advisory firms; most spent 10-20 years at the BBs and then made the switch later
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MDs make $500k base and partners make $1mm base at GS IBD
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