Pay Gap Divergence - Top BB's vs Independents/EB's
Been in the industry for a few years and am having genuinely hard time understanding whether the pay gap ever closes between the top BB's (GS/MS) and top Independent Advisories/EB's (Evercore/Centerview/PJT). Someone correct me if I'm wrong, but when comparing average total comp specifically between GS/MS/JPM vs Evercore/Centerview/PJT the past ~3/4 years of data (excluding 2021 given it was an outlier for the majority of wall street), delta seems to be around the below, obviously in favor of Evercore/Independents.
Associate 1: ~$90k
Associate 2: ~$120k
Associate 3: ~$165k
VP1: ~$200k
The highest delta comes from Centerview/Evercore, then PJT, then Moelis. Lazard seems to be the outlier in paying closer to BB's.
These are massive differences. And the difference is even more pronounced in the millions for Partners / Senior MDs who bring in deals. I recall talking to a Partner at Goldman who moved to Evercore and was significantly happier at the independent platform due to bigger cut and the platform itself.
Large independents like Lazard and Evercore are as well known/respected as the largest balance sheet banks and regularly do better in fees per head. For juniors, they exit on par or better. Does the pay gap ever close to justify staying at larger banks for the rest of the career?
Use the search bar, this question has been answered ad nauseum
Think you kind of laid out why the best talent has been going boutique for years…
[Edit - sorry OP misread some of your wording]
It really comes down to if you want your work to be M&A/Advisory centric long-term? As you mentioned can have great upside in pay, but also can be lumpy if M&A activity is slow. Financing opportunities tend to come at a much more regular pace. If you're a rainmaker, of course you'll be paid more at an EB. But if you don't break in to be the 1 or 2 actual advisory banks on a transaction, there's no place for you to earn a fee for your relationship. On the flip side, if you have a good relationship, even if you don't get invited to work on the advisory role, you might get invited as a top tier lender for the bridge financing and active books on the associated bonds. Fees for those roles may actually rival the M&A fee once all is said and done
Ah, that's my mistake then
BB —> balance sheet (this makes getting deals 10x easier), less responsability, unlimited resources (aka can pitch for everything and anything), fees from lending (so if you close 0 deals your bank will still make money from past deals)
EB —> no balance sheet, more responsability (aka longer hours), limited resources (need to shoot for what you think you will win), no lending (each year your revenues start at 0)
So you are working with less resources, less income sources, and overall more risk. Why would the gap ever close? Why would someone work for an EB if that were the case?
The argument for BBs that I've heard is that it's easier to build a book since you can offer more services and develop stronger relationships through financing deals
Sure, a rainmakers benefit from the EB structure, but it seems like the vast majority of MDs/Partners at EBs started their careers at BBs and built client relationships there
Most EBs haven’t been around long enough to have a significant number of fully home grown (analyst to MD) MDs, so this isn’t really all that clear yet.
Evercore was not the top paying EB (at least for top bucket) the last 2-3 years. I don’t really understand the bucketing of them
with CVP and not with Moelis/PJT.
I think your pay gaps are on the low side to be honest, at least for top performers. Top buckets these gaps are $150k+
Evercore has definitely paid better than Moelis for the last few years including this year - according to bonus threads on this site, MOE ASO1 bonus 100% of base (which is less than the rest of EBs at 185K vs. EVR ASO2 (equivalent of ASO1 at other banks as stub year is considered associate 1 at evercore) 100% of base at 200k. As per litquidity, last year median all in for first year (non-stub) associate was 450k. CVP > EVR = PJT for comp
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