How much do lenders make(Bank/LIFECOs)?
How much do MDs working at Banks or Life COs make? What’s usually there take. I think once I saw some get to take 10bps of production on top of salary?
I guess I’m asking is % I can multiply by their production? To gauge how much they make.
redever any insight here my friend? Curious about this as well.
latinbanker appreciate the shoutout.
On this, I don't really have much direct experience. Have heard some random "data points" and have a sense, but it could be way off (and dated).
My sense, with Bank/Lifeco lender, i.e. large traditional debt platforms within larger institutions, is that pay is based around standard "corporate" type norms.
Thus, a good sizeable base + annual bonus that grows in % with seniority + long-term comp (for bank/lifeco, expect it to be stock as most of these are publicly traded or have similar private shares). I know that for many banks, the annual bonus payout is absolutely a function of their (or their team/units) production, but I am not sure it really a simple bps calculation (but, it could be or partly based on). I think residential originators may get paid on bps, but since those loans are sold, it makes more sense.
I think bank/lifeco lenders would see some of that bonus pay based on loan portfolio profitability more than just production (i.e. the spread between cost and interest charged), that is how a friend of mine at a regional bank explained his comp structure to me years ago.
One solid data point (about 8 years old now in fairness) was for a MD of the commercial lending arm of a mega bank (BofA, Citi, WF, JPM type) who ran the office of a solid sized secondary market. I think his base was like $250k and bonus could get him to $400-600k all in (this was a 25+ veteran), pretty sure he had incentive stock comp on top of that. I've heard mid-senior (like VP/SVP level) at regional banks can get bases of $150K and $250-300k all-in. I can't say I have any direct knowledge on the lifeco side, I'd assume pretty comparable to the big banks (afterall, people would jump right?).
With banks/lifecos, seniority and rank can mean a lot, so I'd wager that factors a lot more than production. So I really doubt the % multiple thing would work, especially for mega sized loan production (like the $50m+ facilities), that world gets compressed fast (just like the IS and DE brokers who play in those size boundaries).
I would echo the last two paragraphs. Another compensation factor is whether the lender is public / private
MD: $1MM+ Director / Principal / SVP: $400-800k (+carry/deferred) VP: $350-600k (+carry/deferred)
I don’t think people at banks get carry lol for Balance sheet lending/agency
It wouldn't be "carry" in the traditional sense of "carried interest" (unless tied to debt fund or venture with carry, which banks/lifecos do have), but there would be long-term deferred comp. Could be stock grants, stock options, deferred cash payments, or a mixture of all.
I left lending for the equity side because I was attracted by the stories of carry, coinvesting, and overall higher compensation at the senior levels.
My former boss was making 500k per year in a 3rd rate city in the Southwest with an extremely low cost of living (EVP Commercial Lending - $3bn, privately held community bank). She just told me she has been poached by a group of senior bankers from the area to join a new start up bank - she is getting an equity stake in the bank upon starting and the business plan is to put a bunch loans on the books and sell 5-10 years down the road. She got “carry” and if the business plan is successfully executed, she will clear a very large sum of money upon exit. Lately I’ve been wondering if I gave up a good career path chasing prestige on the equity side.
Yeah, this is totally inaccurate.
Source: a former commercial/corporate banker.
This is accurate or can be... you can't really estimate what a "lender" makes... there is a wide difference between certain groups (commercial banking vs. CMBS, lifeco, debt fund/private credit/mreit). Someone at a regional/even BB commercial lending makes much less than a debt fund MD, etc (I.e. clearly Apollo credit fund MD makes more than a community banker).
Was at CMBS and now a fund, my MD at both made a couple mil. The other metrics above tie as well (again tho these aren't really comparable to a commercial lending group at TD or community bank). Lending is a large bucket.
Have worked at two life cos and have friends at banks so I can say that this question is impossible to answer accurately. The range is probably $200,000 to $2mm and depends on several factors including the size/AUM of the bank/lifeco, market they’re in, how long they’ve worked there, how many employees are under them, market conditions, etc.
Most all of these are accurate to some extent. Main thing to realize is lending is a sales job, so you get what you put in sort of speak
My old boss worked 25-40 hours a week and was making $500-700k a year. He had been in the business for about twenty five years and built his book of clients / our portfolio. I ran most of the deals while he managed relationships (Took calls and dealt with fires if required). Most all of his peers cleared $1mm, but they were in larger markets and had bigger teams and worked more. This was in balance sheet commercial lending
Equity only really comes into play if you're at a smaller regional type bank (typically privately held), non-bank lender, or a fund. Aside from that, you can get stock bonuses if you're in a management type role but it's usually bonus or commission pay that will make up the majority of the comp when you're a producer
You really need to be in the business for a while to hit high six figure incomes (As with any profession that I know of). It's a relationship business and it takes time to build those relationships
What is comp for top agency producers at places like Walker Dunlop, Berkadia, CBRE, Arbor, Lukent (fka Hunt), etc?
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