Origin of the 70k Base
How long has this been the case at most banks? Why 70k? Do they every adjust it for inflation?
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At most BB banks, the base salary for 1st year analysts in IBD was increased to $70K in 2009/2010. It was $60k prior to this (2006-2008).
Some firms have historically always paid $5-10k higher (e.g. elite boutiques)
I believe it went up from $60k in around 2008.
From what I've read it went up sometime around '09 largely in response to outside pressures on the size of the bonus pools at IBs. In order to still attract the talent with $$$ while disclosing a bonus pool to the public that was reduced, banks increased base salaries.
Base back in 2002-2004 when I was in IB was $55-$60k, depending on the bank. So no, it hasn't always been at $70k and will likely continue to gradually rise with inflation, or maybe faster if they banks want to lower bonuses as a % of total comp for whatever reason...
I think they should do 100 base, and 30 bonus.
They do this in Australia. Higher bonus if lucky or very good
Starting base gets adjusted every few years. It's a case of the banks not wanting to pay more than the other banks, while still upping the base. They really pay attention to what each other are doing and each time a different bank is the first to make the jump.
Then the rest fall in line VERY quickly to no lose the top talent.
Assuming NYC (of course) maybe it's partially based on housing...70k base and no savings will let you get without hassle an apartment where you pay ~1800 per month (40x heuristic). If you're living solo that's really stretching the floor (no pun intended) of living conditions unless you go off the main part of the Manhattan grid, but it's still above the poverty line for nyc.
By decreasing the portion of your compensation that comes from base salary banks retain their optionality and reduce their risk and fixed costs, at the expense of your stress level and quality of life. Think on that before you hand over the keys to your sanity to Goldman Sachs & Co.
Too late
References to the "poverty line" on this website never fail to elicit a chuckle (I don't mean to be adversarial).
The more green pieces of paper you have, the cooler you are. Play the game.
SB+
Poor financiers and their sad little compensations...
Not only am I handing over my keys, but I am purposely shaping my keys to fit perfectly with what Goldman wants, which will "unlock" the doors to wealth, prestige and women.
Am I right or am I... right?
salary is for chumps. it's all about the preftige
When I started in 2007, starting salary was $60k.
In 2008, starting salaries were $0k.
This is basic economics. Banking is a job, and salaries are set just like any other.
What was it in the 1980s? I heard that it was allegedly in the high $20K range during the 1970s!
For second years, is the base set at 80k across all BBs and top MM firms? And 90k for third years?
Do you guys see a bump to 75 or 80k in the near future?
I believe the bump happened in 2008. As a member of the class of 2007, I remember everyone complaining how unfair it was that 2nd years did not get a bump.
Looking back, our 2008 bonus was totally unfair compared to what most analysts get paid today. If we had any idea what 1st year bonus would be for the $70k salary, we would not have said a word.
Bump anyone know if 2nd years get bumped to 80k and third years to 90k?
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