About
- M&A advisory, coverage, and capital markets banker with 15+ years of experience at Goldman Sachs, Credit Suisse, and Jefferies * Broad sector experience with emphasis on technology and FIG * Active interviewer & participant in intern, analyst, and associate recruiting; mentor to VPs
Q&A
Looking to help those from intern to senior navigate this crazy world of bespoke suits, captoe oxfords, and midtown uniforms.
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I'm sure everyone is going to ask great questions but I'm gonna go ahead and ask the one everybody wants to know, MD Compensation.
I'm also sure this will sound stupid and immature but I don't care. It's rare that the opportunity presents itself to get this type of information and this is an anonymous forum with an “Ask Me Anything” so I’m gonna go for it.
Here are some things I keep hearing/reading:
"Average MD comp at BB is 1.5mil, some in a good year make 5+mil."
"EB MDs make less on average compared to BB MDs but can make a ton as they get fee split"
"MDs who don't produce get let go quick"
Please feel free to answer any of the following questions:
Obviously this is a lot but some people on this forum are genuinely looking to be in banking for the long haul and I imagine this information could be helpful as well as excite the never gonna make it intern hopefuls like myself.
Thank you
Hey, like the direct questions. That's why we're here. Some direct, real answers for you:
1.) What is the median MD salary and bonus at each investment bank you worked at?
Can't give a precise median or range as different people get different packages, especially if you lateral in. But in general, 350-400 base for all MDs (junior, mid-level, senior). Range of bonus 750 and up, depends on performance and seniority. Under 750 total comp, you're probably gone at a BB. Remember, most of the bonus is shares, so when you actually crystalize the shares that comp number might be lower or higher than the day you are told it. Of course, exceptions for superstars, but don't include yourself in that.
2.) How does MD compensation differ at BBs vs. EBs?
Generally, probably more upside at EBs. Smaller pool of people. And if the EB is not public, all cash on the bonus. BUT likely to have clawbacks etc. They ain't stupid.
3.) How much revenue does an MD need to bring in and how does it tie to compensation?
Depends on group, city, product, BB, EB, MM etc. No hard and fast standard across banks. You got to see when you go in what they are looking for. Have had approaches saying must be 5m annually, others saying 750K!
4.) I imagine bankers with good track records can negotiate guarantees, what are some of the common negotiating points in these contracts?
Common misconception. Guarantees are not a given no matter how good or bad you are. Really the only real negotiating point is that they want you and you don't want them. They need to offer you something worthwhile to leave your current place for the risk.
5.) What is the ratio of Rainmaking King Pins to other MDs?
Like 1 or 2 rainmakers. Big myth that each bank has several. Most will fit into the decent bucket. And a small tail of bad/just getting by bucket.
6.) As bankers move past VP and begin the revenue generating process, what quality in your opinion most separates the future rainmakers from the paper pushers?
Those you are actually meeting clients. It's not about doing execution 24/7 anymore. No one cares that the bullets are aligned or the colors are matching as much! Going to meetings with senior bankers, speaking at those meetings with good points or knowledge and content. Paper pushers will be great at ensuring all the books are tabbed properly and delivered to the right address. Forever VPs.
7.) MDs don't stay around forever obviously, what reasons make up why MDs leave? Is getting fired #1? Other opportunities or retirement?
No clear #1 reason. But money is in the lead pack. Once you feel you have enough of that, then getting bored. Getting fired as well. These days the older MDs sticking around for every last squeeze of the lemon. Some will be told that it's time to leave and a gentlemen's exit will be figured out (you know those great leaving emails from the CEO about that MD leaving to pursue other interests.) Others will make that decision themselves (or forced by their families), but this is rare.
8.) If you were to mentor an upcoming analyst or associate and they had the option to choose BB or EB and they wanted to do banking long term, what would you recommend and why?
BB. Get the skills and exposure to a variety of deals and people. Deal/see the politics, sharp elbows, the assholes, the greats. BB will have all of that. Then start moving to smaller shops where you can be the big fish in the pond. Obviously EBs can provide more hands on experience, but less deals roll in and you might end up on one deal for a long period of time.
Thank you for offering to help. As an intern with limited experience in banking, I would be grateful if you could kindly share your insights into a few topics.
First of all, how is your experience in M&A compared to capital markets? Which one do you enjoy a bit more?
Secondly, how can an intern really stand out and win return offer? It seems like everyone would be working hard and networking around.
Finally, do intern’s school, GPA, previous experience, etc. still factor into the return offer decision making?
Thank you again.
Both are worth doing over time. But don't start off doing cap markets as a junior. You won't learn much in terms of hard skills. You can get good at "reading the market" (whatever that is), aka bullshitting. Corporate finance, you'll learn valuation, industries etc. Great to use for later. Also, you can move into cap markets and having a good corp fin foundation is useful.
Standing out is a combination of things. First, do the work and do it well. Ask questions and don't presume. But the one I tell every intern is mingle with the people you will be working with - the analysts and associates. Sure say hi to the Ds/MDs etc, but don't blow your load on them. They will be polite and say hi, but most don't remember your name when it comes down to decision day. Trust me. Guilty as charged.
ANLs/ASOs will be spending their entire life with you, so they must trust you and like you. Hang out with them. Go to drinks / events etc (don't drink? Then drink and spit it into an empty bottle and pretend it's a chaser!). But do whatever bs work they give you. When they are senior ANLs and ASOs, they will be giving you this type of work, they must trust that you can do it well. No better time to start when an intern.
School, GPA etc don't matter much if you've got the internship. At this point, pretty much everyone is on equal ground (unless you a princeling, but you wouldn't be hanging with them anyway). What counts here is whether they like you and can you do the work.
Didn't go to b-school. If you are an ANL and can keep going and want to stay in banking LT, then my rec is skip it. However, it is a good hedge if you decide later that you want to get out of the industry. Lots of good networking there. Really depends on your tolerance. Also, no point in going unless you go to a top, name brand one. Unless you really do want to learn...
I'm currently an Associate at a MM firm (think Blair, Baird, Houlihan, etc.) working on my MBA at night, it's rough but doable if you know how to manage your time. It's not a target or "name brand" school but a number of individuals from my undergrad class (b-school same as undergrad) went on to MM firms in the realm that I mentioned earlier and have subsequently gone on to PE or BB (Goldman, Citi, etc.) so we place decently in IB. I'm finishing up my program this year and will most likely make a move to PE. Even though I didn't go to a name brand school I'm curious how you think someone or even you might view the fact that I got my MBA while I was still working successfully as a banker and consistently ranked as a top performer at my firm.
At what point did you realize you wanted to make banking a career long decision? I have this theory that no one ever sets out to become an MD from the onset, but that the remaining group represents a subset that was 1) successful across all the levels and 2) it financially made more sense than pursuing some other 'passion'
I ask because I tend to find if I talk to other Associates/VPs, rarely (if ever) do any of them say they are gunning for an MD role one day. Did you find this was true with your friends/colleagues or is this a younger generation thing?
Are you faithful to your wife?
A good banker exercises discretion verbally and in written responses.
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What are your typical hours, and how have they changed as you’ve become more and more senior?
7/8am to about 6/7pm. Solid 12 hrs Mon to Thurs. Fris can sneak in a little later and leave earlier or "work from home"...
Hours don't necessarily get significantly better as you become more senior, but you definitely aren't working to midnight / past midnight (unless big deal going on). The key benefit is you get more control on your time, so you can actually make dinner with your significant other or friends etc.
ANL to ASO was a straightforward process. Filled out a form saying why I wanted to be an ASO. Pretty standard, generic responses etc. Reviews obviously go into it. Also, speak to people you work with to ensure they are thinking the same and would support you.
ASO to VP got promoted early. Reviews of course. But what made it stand out was that I started to act like a VP when I was a mid-level ASO. Wasn't trying to be a know it all, but started seeing what my VP did and replicated the good and made the bad into good. Big thing was to anticipate what people wanted - analysis etc.
VP to D for me at least was pretty straight forward again. Reviews and filling out a form as to why I thought I am a D now. This required more thought and focus on client skills, not all execution like in the earlier promotions.
D to MD, all about clients. Who you know. Who you meet. etc. Feel this one had the most back-channeling involved. Need to be political and make sure in your D years you are speaking to other senior folk who will support you. Also, try and do work with them so they can see it in the wild.
Lol you all got baited so hard he ain’t responding.
Chill man. Doing deals.
Great thread! Thanks for doing this and giving these kids a dose of reality. Lot of hype on this site represented by people who think they know (but don't have the experience).
Overall summary from what I've read is, like any other industry, to move up to senior levels they're really looking for leaders with business / social acumen. Ultimately it comes down to being able to source deals. If you can't, you can't, and will never make MD (or stay MD).
The lower level functions/ technical skills are taught / acquired on the job and therefore replaceable. In fact, are replaced every yr as AN / ASO leave. Hence the recruiting pipeline.
At the end of the day, they need to know you. like you, trust you. Not really any different than achieving Partner at a professional services firm, senior exec in F500, etc. Soft skills become very important as you climb the ladder as no one wants to work with a jerk.
Cheers!
What do you look for when interviewing summer candidates?
Generally, good personality and ability/ sharpness to learn. It's already assumed that if you got an interview you're smart. One quick glance at the resume will confirm this. Ain't gonna sit there asking you for your GPA and brain teasers.
But will ask you what's going on in the market? What deals / trends / companies excite you? Worry you? Thoughts on perhaps the main business news of the day/week.
And what do you do for fun? Need to know you're just not a robot.
PM’d you