Question About Bonuses
I was scrolling through the forums here and a question came to me… for analysts, are bonuses truly based off of personal performance? Or, are bonuses based off the number of deals the group gets and dispersed evenly across the different levels of employment in the group? (analysts, assoc, VP, etc) I understand this is may also be a “bank-to-bank” thing, but what’s the industry standard?? I’m interning at a MM next summer and would just like some clarification on the split.
Thanks!
Hey EPAsshole, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:
More suggestions...
Hope that helps.
It will be a function of both bank performance and personal performance. Generally firms ‘bucket’ analysts by performance and those buckets are shifted up and down by firm / group performance. You probably already know this but as an intern you won’t get any bonus.
Yep, most banks will have buckets that analysts get ranked into and then bonus # for those buckets are based on group/bank performance. Many banks will have buckets the same across all groups at the analyst level (i.e. bucket 3 analyst in healthcare gets the same as a bucket 3 analyst in Tech). Typically most analysts will get the middle bucket, if below that you're generally on your way out the door.
Example below:
Bucket 5: $130k bonus
Bucket 4: $115k bonus
Bucket 3: $100k bonus
Bucket 2: $50k bonus
Bucket 1: $0k or laid off
Gotcha, so the buckets aren’t even based on your office performance but the firm as a whole and split evenly across the various tiers of seniority. Are those bonuses slightly inflated due to the super hot M&A markets in the past year or so?
Most of the firms I've seen the total pool for analysts across groups based on the firms overall performance.
I'm not sure what you mean by "split evenly across the various tiers of seniority". I'm referring specifically to analysts. At the higher levels bonus becomes tied closer to direct fees brought in by the individual / group. At the analyst level the amount in the buckets is higher for more senior analysts. Following the same example Bucket 3 might be $80 /90/100 for AN1/AN2/AN3.
Those numbers were meant to be illustrative, not necessarily an actual bonus number for a bank. M&A markets have been pretty much dead for a year. In general, 2021 had super hot bonuses, 2022 was closer to 2020 levels if not below for most banks (and many banks had layoffs so bonus wasn't guaranteed).
Oh I’m with you, I didn’t catch that you were referring to only analysts. Thanks for your help!!
As people mentioned above the industry standard is to use buckets, but the $ range from bottom bucket to top bucket can differ a lot by firm. Might be something you'd like to tease out during your internship if it's going to affect where you want to work and how hard. At my old MM firm, the range was very small (~20% of bonus) between top and bottom which pissed a lot of people off.
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