how much less do professionals make outside of NY?
Let’s say your a respected VP/MD operating out of the NY/LA office, hoe much less are you taking home a year? Also, let’s say you’re working at a top PE firm or HF with central offices in Dallas or Atlanta or a similar city, how much less do you tend to make relative to your NYC counterparts?
Unfortunately, people aren't exactly flocking to NYC at the moment.
How is Houston disgusting, especially compared top LA/NYC?
At BBs/EBs/top MM firms comp is pretty consistent across offices (could be even higher than NYC if you believe the stories about Jefferies and Ralph Eads). PE is much more variable and typically lower (e.g. if market for VPs at MM firms is ~$400-450k in NYC, it's probably more like $300-350k in say, Austin or Denver).
Our domestic satellite offices or international offices don't get city weighting (ie London weighting is about 15% IIRC), from where I sit that would be the key difference. They might be able to claim other packages though, depending on whether they are driving or using public transport.
How much less are you taking home? Did you mean to ask the opposite....
A great irony in investment banking is that people in the New York offices of the prominent (BB/EB/larger MMs) investment banks will usually take home less than their Chicago/Houston/Charlotte counterparts due to the combination of state/city taxes along with the exponentially higher cost of living.
just to clarify I mean how different is the salary/bonus not adjusting for cost of living
Salary / bonus are the same. The advantage of NYC is mostly that there's a lot more opportunities and senior opportunities tend to be concentrated there.
and also w respect PE let’s say the pe firm is headquartered in one of these other cities
you need to get down to the actual crux of the issue. all of these comps/discussions are only discussing the outputs and not the actual input. think about it like you think about companies and businesses in all your case studies and shit -> how do they make money? what are the drivers? compensation is based on P&L production -> deals signed * fee * deal size etc. for bankers, and AUMmgmt fee + AUM performance fee over hurdle etc. /split by how many people need to share the pie.
that’s all it is. that is ALL. so once you realize this, all the following outputs you can solve for yourself. people generally get paid more in NYC on average because AUM is higher there and dealflow may be too. but if it isn’t, like if the Houston office runs as much AUM or dealflow as the NYC office in large global firms, then pay is the same, or even less.
Now that you have the LOGIC behind everything, you don’t need anymore discussion about LA vs. Chicago within the same firm or LA boutique vs. NYC MM. you’re solving each scenario one by one through that method (called proof by exhaustion). I’ve just given you an algorithm (albeit rough) to solve all the permutations
You work at a algo fund? Not sarcastic lol
This guy FIGs
He has it FIGured out.
Yes - I used to be an Asset Management M&A banker in my prior life...so yeah I built a lot of these operating models.
Something which I didn’t mention but should be noted is that this revenue model only applies to senior folks/partners of course. the junior bankers comp isn’t directly tied to firmwide P&L and more a function of the labor market in the area & supply/demand for talent. seniors won’t pay their juniors more than they have to even if they themselves are making a killing (debt vs. equity ya see). so it could be possible in different geographies the labor market idiosyncrasies affect the junior/mid level pay. Only when we stop being W2 wage slaves will we break free
Yes - I used to be an Asset Management M&A banker in my prior life...so yeah I built a lot of these operating models.
Something which I didn’t mention but should be noted is that this revenue model only applies to senior folks/partners of course. the junior bankers comp isn’t directly tied to firmwide P&L and more a function of the labor market in the area & supply/demand for talent. seniors won’t pay their juniors more than they have to even if they themselves are making a killing (debt vs. equity ya see). so it could be possible in different geographies the labor market idiosyncrasies affect the junior/mid level pay. Only when we stop being W2 wage slaves will we break free
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