Came across this today
A 32-year old banker pulling in $700,000? These days are Vice Presidents in IBD raking in anything near this? Sort of makes me want to reneg on my interest purely in Research...
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Those were good days. I look back at my peak total comp from that era and dream of seeing that number again.
Bonuses were much larger back then.
Yup, those were the days: http://dealbreaker.com/2012/04/bonus-watch-2007-this-is-how-much-every-…
^Some associate at Lehman made $600K, and median for VP's was $568k. Things will likely never be that rosy ever again.
And as a personal anecdote, one of the VP's I worked with told me he hasn't again come close to making as much as he did when he got promoted to associate in 2007.
What kind of levels are they now? Still seem pretty high to me personally, but I'm basing that on anecdotal evidence - I know of 2nd year associates last year who got ~$400K all in (Australia). Granted, well-regarded associates at a top bank. Is that in-line with current US IB pay?
No
What do top-bucket 2nd year associates at top US banks get? 300? More/less?
I definitely made more than that as a VP1. Comp is slowly starting to come back to those levels, but its much more group and team specific. Banks have become better about differentiating comp.
$300K for a second year associate is doable, especially for next year with base being $175K.
Sounds like it's pretty comparable between Australia and NY if you factor in the exchange rate
Where have you heard $175 base for A2. I am an A0 at a top mm and have not heard this number anywhere. I am at $125 for A0/A1.
Some BB offices in Canada get paid 140 stub, 175 A1, 200 A2. The amounts were set a decade or so ago when the C$ was at like 0.60 and they never moved it.
A couple of years ago a 2nd yr MD told me the most he ever made was as a 3rd yr VP.
A director told me he made $415k as a 1st yr associate in 07. That is not quite double what I got as top bucket at BB my first year...not adjusted for inflation.
I think the question worth exploring is a 'cut' breakdown of revenue producers and how much is shared or hoarded.
Post-MBA IBD has picked up, but it's nowhere near pre-financial crisis and never will be (at least in the foreseeable future). Ditto for S&T.
A bunch of my classmates got IBD offers and are deciding on whether to accept. Very few of them actually WANT banking. Some of them are depressed at the prospect of working 80-90 hours/week for a job in overpriced NYC that doesn't pay that much. Yes, IBD raised base by 25%, and signing bonus is pretty decent, but once you factor in NY state tax, NYC city tax, outrageous rent, higher COL for virtually everything, and lack of desirable post-MBA IBD exit opps (going from post-mba ibd to buyside is very hard), it's just not that great of a deal. My classmates recognize this, hence their hesitation to accept the offers.
Finance is coming back. I think the tech bubble is coming to the end in the next 2 years. If Stanford GSB grads are moving back to Finance over tech, you know it's a leading indicator.
As an aside, that spending diary of hers is really depressing.
Do investment bankers get payed increasingly with company stock as they move vertically through the company?
Yes. To my knowledge most banks have caps on the cash component of total pay and when you exceed that cap the remainder of your comp is stock (as long as the bank is publicly traded, of course)
MS is the only bank I know hard facts on, but I assume most BB are the same way. MS cap cash bonuses at $125,000 and the rest is in stock, so yes, the higher you move up, the more of your bonus is made up of stock.
Guys. Seriously. Stop.
Banks don't "cap" your cash bonuses. You get paid an all-cash bonus up to a certain point, and then beyond that point, a PERCENTAGE of your bonus comp is paid out in stock, which generally vests over a 3-4 year period.
Aren't we saying exactly the same thing? I know of at least one bank that has a very literal cap on the amount of cash that can make up comp - doesn't affect your comp figure, but once your comp becomes higher than that level you get cash to the cap and stock for the rest.
In your scenario, if someone were to get a $200k bonus, and the bank had a "cap" at $100k, that person would get $100k in cash and $100k in stock. This is NOT how it works.
In my scenario (aka reality), if someone were to get a $200k bonus, that person would get $100k in cash + 33% of the next $100k in stock and 67% in cash, equating to total bonus comp of $167k in cash, $33k in stock.
All of the above numbers only apply to bonus comp (base is unaffected and always all-cash) and obviously the numbers are theoretical, since the "cap" as well as the %' stock / cash split differs by bank. However, what you've described (a hard cap on cash comp) is completely off-market. I highly doubt "at least one bank" has a "literal cap" on comp, and even if it does - again, that's totally off-market. The more likely explanation, however, is that you don't know wtf you're talking about.
A 32 year old investment banker should be around Director level, or high VP level if they decided to pursue an MBA. VPs at BBs make 350-600k and Directors make 500-1.5M
2 years analyst, 3 years associate, 3-4 years VP--> Director. 32 years is HIGHLY feasible, given that fast growing boutiques like Moelis and even some BBs have MD's that were home grown under age 38.
Do you think the pre-2008 bonus days will have ever come back? (Originally Posted: 02/28/2017)
With new regulations and laws in place ultra high bonuses don't really exist in S&T as far as I'm aware.
they exist at hedge funds...which is why most all of the great sell side traders and strategists still go to hedge funds
banks have decided to pursue lower risk strategies...and that includes not paying large S&T bonuses
Also prop shops ;)
Money for nothing & chicks for free...
Umm no, of course not.
Pre-2008 BB Prop Trading Comp vs Hedge Fund Comp (Originally Posted: 08/23/2014)
I heard things from my PM that before 2008, prop trading at BBs actually paid better than most hedge fund carry at the junior-mid PM level.
Can someone who worked at BB prop desks prior to 08 confirm this?
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