Shouldn’t 2020-21 bonuses be massive
So I am just a lowely intern, but I was thinking, if the whole reason GS has debated raising base is because of the “eat what you kill” mentality shouldn’t analyst bonuses be at least double in busy groups this year? If hypothetically in 2019 10 analysts are on a team that generated 100M in fees each get an avg 50k bonus, does it not track that they deserve to get a 100k bonus if the group closed double the amount due to the insane deal flow in 2020-21? Makes no sense to me and incentivizes analysts to “hide” and do the bare minimum and just coast to middle bucket by not fucking up. Am I missing something?
Should they be higher? Yes because juniors are getting crushed harder than any time in the past decade or two. Will they be much higher relative to the extra hell? Probably not (although might be a bit higher). It’s supply and demand. Every good bank has a ridiculous number of applicants on the daily. I wish it weren’t like this but that’s the name of the game.
I think if bonuses suck turnover will be even worse than anticipated and future generations of young ib people will look to leave ib even sooner after seeing how shitty bonuses were during covid. I think this will lead to even higher compensation for future generation of ibers in 2-3 years, maybe sooner if turnover is really bad.
They were slightly higher at my bank (BB coverage), but probably only like ~$5k higher than prior years.
Talent retention isn't really an issue at the analyst level. We are underpaid relative to associates because they plan for us to leave after two years + there are so many applicants. That being said, in a given analyst class, there are probably a handful of kids that are capable of training the incoming class (and have consistently done so prior to COVID). If those kids end up leaving before the 1st years arrive in late August/September (which seems like it'll happen at a lot of groups at my bank), then the analysts will have a pretty rough time towards the latter half of the year unfortunately.
EDIT: I'll also note that, while there is a big difference in skill/attitude of a mid and top bucket analyst, the reward isn't reflective of that gap. Meaning, you could be putting in 5-10 hours more a week for only 10% bump in the bonus (arbitrary numbers). Banks incentivize us to be middle-bucket by default since there's not much difference in terms of output. A top bucket analyst might get something done slightly faster, but the middle bucket analyst isn't going to be slow by any means. Maybe the top bucket kid catches a couple more formatting errors here or there, but in the grand scheme of things - it's likely they both know how to build the same model or shell out the same materials to some degree. The job isn't rocket science.
My group is looking at at least a 35-50% increase in bonus this year compared to the last.
Lol, most of the BBs and EBs are public companies. They make profits for their shareholders, not for analysts and associates. If they throw a few extra breadcrumbs here and there, it’s because they need to in order to retain talent and be competitive, not out of some middle school notion of fairness.
This is it. Banks serve shareholders, and they will do everything to pay flat in good years and lower in bad years. Harsh but true reality is incentives are never aligned, and the only way analysts will actually get paid is if there’s a max exodus, more GS 13 cases, or noticeable shortage in talent.
Are M&A first years only getting $50k usd bonus now? what a joke
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