Most MD's I know in London or Hong Kong office don't make over 1 million total compensation in most years. This might not be true for New York but across other offices its pretty normal.
Of course there are major exceptions, some MD's will be making 500k total and others 10M total but most don't seem to ever make more than 2M even in a good year. Am I wrong about this?
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Yes of course it is still very very good money but you won't make you super rich either with taxes and everything else. The big money seems to be in PE, VE or hedge funds and also for some (very rare) traders in banks who sometimes make huge bonuses.
If you think you are going to make 9-figures in finance working for a corporation you are wrong
Crazy money comes with crazy risk. Obviously there are ways to minimize that risk with proper education, network, work experience, etc. but no “ultra high” net worth individual made their money working at an investment bank unless they themselves own(ed) it nowadays.
Same can sort of be said now with many PE shops. As they get larger and more people make partner the pie needs split much much more and sometimes it’s not accompanied by proportionate growth. If you are serious about making $100 MM + you have to take some sort of personal financial risk. Other than that you can make good money in finance (8 figure net worth) and there are some who will make $100mm+ working for others but the vast majority paved their own trail
Yes I understand that the very big money is only made by actually having a stake in a successful business. Although there have been investment bank traders that have made 80M+ bonuses prior to 2008.
Even the Zaoui brothers only made 1.5M each last year, and they are the best in Europe.
I think it’s more likely they aren’t the best in Europe lol
This. Look at what Simon Robey and partners are paid at Robey Warshaw.
So what?
Well I want to be making much more than one million a year. I guess the only way I can do that is by rising to partner/senior management (like head of regional or even global trading or something like that) at an investment bank or becoming PM at a hedge fund or starting my own hedge fund.
lol at people giving me MS for saying that I don't want to be stuck at 1M/Year. Seems like this forum has some jealous people on here, too bad too sad for them.
Ah okay - sounds good.
Didn't MS btw
I was about to say, “no way…,” until I saw the part about “not New York.”
Yes, salaries are lower in Western Europe and Asia. However, you have lower expenses (healthcare, education,…), a more “functional” society in terms of safety/infrastructure/transportation/social cohesion, better working conditions (at least in Europe), and are surrounded by a healthier, longer-living population.
If all you care about is money, you’re just not going to beat New York. But…there’s more to life than that.
Yes probably true, the quality of life and IBD culture in London is 100 times better than New York apparently. I guess it kind of makes up for it, although I was still surprised at how low compensation is for MD in London. Would be worth it to do a couple year stint in New York I think.
New York is a shark tank. Working conditions are intense, culture is hyper-competitive, and there’s not as much to catch you if you fall. Definitely not a “quality of life” city. However…if you’re interested in making money, there’s no better place on Earth.
I imagine WLB in IB in London is pretty terrible, not “100x” NYC.
also, almost no student loans or extremely low for Europe - that's an important aspect that builds a fraction of US salaries making them higher
Everything costs something.
In the US, you pay less for social services and leave more money in your pocket.
In Europe, you pay more for social services (i.e., much higher taxes) and leaves less money in your pocket. You also pay a premium for those working conditions, etc.
Anything else would be insane. Becoming MD is a very risk-averse career and you don't need to perform that well. Get into IB, put your head down and eat shit for 10 years. Congrats, you're an MD. In difference from other industries, you get automatically promoted in IB unless you have fucked up BIG TIME. Only way to make insane cash as an MD in Europe is to be at an "eat what you kill" type of shop.
People in Europe don't make that much tbh. For example, a VP at an UMM in the Nordics will make about $200k a year before a tax-rate of +50%.
Brutal when you think about it but it makes total sense. Is this only for IBD though? like do you actually become MD after a certain amount of years with average performance? Because I know that in S&T there's a lot of people who won't make MD ever and there's some who will make MD at 28.
Yes, pretty much. It's not like you need to be a superstar to become MD, you just need to stick around for long enough. Of course, you still need to be decent at the job but it's not like just the top 1% of bankers make MD. I have worked with many junior MDs who are so stupid that you wouldn't be able to imagine. I'm not even just talking about their ability to bring in business, but just being completely unstructured and clueless about exactly everything even on some of their own most important deals. Banking is very repetitive, has a brutal culture, is often not very exciting, and has brutal hours. The difficult part is sustaining that environment for 10+ years to make MD, not performing well enough to become MD.
I would say it's still a great deal though. Clearing EUR 1m a year when you're below 30-40 years old is amazing for a job where you never took any real risk and doesn't require you to be an exceptional performer. A CEO for a mid-sized listed European company will make about the same cash and that CEO will often be 50+ and have been an exceptional performer. If you entered any normal corporate job, were an average performer and stuck around for long enough you would definitely get stuck in middle management making EUR 100k a year by the time you retire if you're lucky. So by all means, becoming MD is still a good deal compared to any career outside of finance.
A VP at an UMM in the Nordics doesn’t have to pay for healthcare or high-quality education and gets to enjoy a much better WLB in a safer, healthier, more affordable society.
I travelled to the Nordics and stayed there an extended period of time, even went back on a European trip recently and was still in love with the place. It would be a dream to work there but I feel this would never materialize because 1.) I do not speak any of the languages, and 2.) have no MFin (which I know is common in Europe). However, I do have experience at a top shop in the states, you think that the chances of going there are slim to none?
are you talking about S&T MDs or like IBD MDs
I'm talking in general to be fair I know MD's from both IBD and S&T.
Business valuation MDs make $500K selling PPAs and transfer pricing valuation work.
Damn thats low. Lets be fair with that kind of income you aren't living the high life if you have taxes and kids to pay for. Yes you would still be living very good but you won't be able to afford high quality home ownership in London, New York, or Hong Kong.
True, but if your spouse works and if you make decent investing decisions, you can do quite well. The trajectory to MD in bval is about 10-12 years. And, over those 10 years, you'll work at most 70 hours/week in years 2-3; 50 hours/week in years 4-7; and 30-40 hours/week in years 8-10/12. Pressure for Bval MDs is much lower and it's very easy to find work should you decide to leave/get fired. There' also upside income potential at partner level and those that get into expert witness (litigation/arbitration support) can clear 7 figures annually.
don't get kids and invest your money so you have an additional stream of income
For the lifestyle, it is not worth it at all. My dad is in F500 C suite and him/all his friends & connections at that level have great lifestyles and pull $1.5-6mm annually. Much more interested in that path after seeing how seniors are living here tbh.
Wow thats a dream combo to be fair. High salary + not too much stress. Good on him.
What are their prior backgrounds? (IB, PE, Corp Dev, F500?)
You'd be surprised- in the finance and operations roles it was almost all internal growth based on the many people that I have met.
From finance controllers --> manager --> director --> regional vp --> group vp ----> president --> C suite. And the 7 figure comp (base + stock) starts at SVP level.
Ops wise from Engineers to operations directors (with P&L responsibility), then the same path all the way to COO.
There are Biz Dev and early career IB folks sprinkled in that I've seen. I really believe as this generation of management phases out of corporate America doors will open for us to swoop in, I'm excited about that. Don't see the point of being a banker and just getting hired for 6 month periods to execute transactions versus building and growing something with a team over a long time horizon. But banking is still a good place to start.
I know nothing, grand scheme, but this sounds about right and makes sense given them below.
My estimate is that base base comp for an FO MD is ~£250k+ in London. (Given that VP is ~150k+).
With 100% bonus (which btw is still the max in EU/UK bar specific permission, although I'm sure there are loopholes), that comes to ~500-600k.
Happy to be corrected.
Sounds about right for Junior MD.
At more senior levels firms get around the bonus cap by paying higher salaries.
Bonus cap is 2x
It's 100% without shareholder approval. Hence "bar specific permission" (couldn't remember if it was board or shareholder).
Poached MD packages at one of the better advisory boutiques in London range from 2 - 4 million p.a. depending on seniority
back to work plz
Junior md in hk takes home 6-8m with ~30-50% in locked in cash or shares vest in 3-5y
It is garbage tier salary taking into account of the difficulty (and luck) making md in hk and the exit for bankers are mostly shit
A fresh graduate dentist or doctor at 25yo in private practice makes 1/3 of this all cash and 2/3 of this by 30-33yo while going home at 6 with 5.5 days work week.
This is what I saw from VDR in a HC deal. Median pay to doctors and dentists of an hk clinic. Fuck it too late to switch track
pls fix - convert to USD or GBP thx
It is pegged so pretty easy to convert, just divide by 8
Around 750k-1m for junior md in hk all in
Damn how long does it take to become a dentist in HK lol
Could you PM me pls? Would love to talk more
I can’t speak to HK but have worked in London and NY
London is VERY variable for MDs. At the European commercial banks, MDs tend to start at £500k total comp, with £800-850 as a median and £1.25mm being exceptional.
For US BBs (and even DB / UBS and to some extent Barc), junior MDs will start at £700-800k but it’s common for tenured MDs to be in the £1.25mm to £1.5mm range, with high performers over £2mm. Someone making £4mm is typically a top group head and someone making £6-7mm is a banking head.
Numbers are a bit higher at the top MMs on average and at the independents with more upside variability. At my MM, median MD comp is £1,5mm, with some high outliers.
The tax rate is like halving the pay here whereas PE at least some are structured as carry with capital gain.
Is there a way to optimize tax as an MD?
It’s harder at the BBs. It absolutely is possible at places like Laz / Roths and other private firms as well as the independent advisory firms.
Jeff or HL?
I did an accounting internship and used to work on payroll for a bank on Wall Street
From what I’ve seen, the mds salary were usuallly around 250-400k and bonuses were around 200-300k.
Is that only FO MDs, or are you including BO MO as well
he is talking about the CEOs payroll (think Dimon/Gorman, etc.). MD salaries (and he can confirm) were between USD 60k-90k and bonus was 5k-7k
source: trust me bro
Pretty sure it's BO/MO. $250k is EB associate base ...
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