Is comp in finance decreasing?
Is comp on in IB and PE decreasing every year? I've heard people argue that since bonuses are getting smaller each year, tech is looking to be a nice alternative to IB and PE jobs because of an overall lower revenue coming to banks and PE firms.
Are bonuses actually decreasing or is this just a falsehood to make finance look bad? Obviously bonuses arent comparable to what they were like in 2007 but has there been a large decrease from 2012 to the present for example?
Why would it not decrease? As any finance person knows, excess returns do not go on forever
Compensation in IBD has increased meaningfully since 2007. Bonuses definitely decreased during the recession, but overall compensation has very much rebounded. While bonuses may still be lower, the base salaries have gone up significantly. To put it into perspective, when I was an analyst in 2007 the bulge bracket banks were paying analysts base salaries of $60,000.
Also keep in mind that the 60000 you talk about isn’t adjusted for inflation, it’s real value may have very little change from current comp packages
Guaranteed comp vs. bonus. Shrinking bonuses but increasing base pay (I'm a first year at 85k). I'll take the higher base salary personally.
Have a good buddy who just started with a well known social media firm in Silicon Valley. Straight out of undergrad (nothing special, no Ivy League) and his starting salary is $127,000 before bonus. Its not the ultimate thing, but it is nothing to ignore.
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