2021 S&T Bonus
My P&L doubled and my desk P&L up 150%+ YoY so far
Tier one bank, high yield credit desk.
VP. Last year total comp was around $200k. Do you think I can expect a 50% increase to $300k this year? Possible a 100% increase to $400k?
I know it is a tough year. Bad year for many divisions and desks. Federal Reserve asked bank to curb dividends and buybacks so shareholders may not like a pay rise now. I also understand the pay is linked to supply and demand instead of performance. But can anyone give me any tips? Is your bank going to increase S&T pay this year? Sep and Oct is usually when companies make decision about high level bonus plan as new fiscal year starts.
Is your company going to pay S&T this year?
JFC VP total comp is 200k? Is part of it deferred? If not, I gotta got out to tech then
Banks are not going to pay bonuses, or very low bonuses this year. Loan book is in shit, too much bad press if traders get paid, and job market is very abnormal right now.
If anything, cuts in markets will begin in 2021
Depends on firms.
Tier one BBs usually don’t pay you well because they have a brand premium.
There are people willing to receive less to work for their “dream companies.
If you are junior, you likely to see higher bonus because your base salary is low. Usually as your base salary increases, the bonus decrease. There is a max compensation limit for each level in these firms. For VP is around $300k and for D/ED around $400k. For MD there is no a real limit, as a MD can be head of capital markets or just a desk head. To be a head of capital markets, you must be really good at playing politics.
Smaller European / Asian / Canada / Australia companies can pay you more, the catches are:
1. you must be very experienced, you are likely to be a one man team or work in a very small team
2. these firms very likely to leave US market suddenly without notice.
3. these companies likely to pay you more in first year through sign-on and guaranteed bonus, but not good at refresh
4. these companies lay off often. you get less job securities.
unless you are hired from another firm with pre negotiated offer, $300k is not really realistic for most of VPs. Usually after you work for 5 years, your total comp is going to be around $250k, then they will promote you to D/ED. Some firms will let go those VPs who didn’t make D/ED within a few years (up or out) to make seats for junior people, some firms you can keep your job but your total comp unlikely to exceed $250k as a VP.
Not just smaller firms, most of firms are really bad at refreshing bonus after year one. Sign-on and first year guarantee bonus is more like a bait.
It really doesn’t help to discuss S&T bonus without being specific.
Overall, nobody can disagree that mean and median compensation for trader is decreasing over years. It is paying well in many places, but not as good as they were 30 years ago. What gives me nerve is the trend. Am I get paid relatively well today? Yes. Will I still be able to get paid well after 10 years? I don’t know. It really sucks to be jobless with no other skill when you haven’t saved enough money to retire early. I will say $5 Million is the amount you have to have to retire around 40s. But it is not easy to save that much before you become jobless in your middle age. There is also not many exit options for traders to be honest.
In the end of day, trading pay is very volatile. A product could be good for a few years then screwed for many years follow on. You can’t really expect same level of pay every year.
I agree bonus is no longer linked to performance. My friends doing exotic fixed income in a big BB, very hard for him to move elsewhere. Not many banks doing these products anymore. So even though his desk made a lot of money, his take home pay is not so good.
Then again, you also see some desks get more automated, especially in on-the-run treasury and certain IRS products. It is still too early to say robots going to replace human jobs, but for some products it is already coming.
For the same product, your pay will vary depends on how your bank think of it. For example, equity derivatives desk in some BBs are focus on flow with strict risk management, so these banks usually don’t pay their trader well. These banks just deem trader as “human quoting robot”. Management in these banks think desk performance are more related to the franchise and risk management system , not trader skills, so you don’t get paid much for performance. But in some places, traders can do trade with less restriction, so their value is indeed being appreciated by the company.
How to tell what’s a good desk or bad desk? Simple. Increasing or decreasing headcount. More headcount usually mean that desk is growing for the bank you are working for. Less headcount usually means more pessimistic future in management’s perspective. Bonus allocation in any big banks is very political, so you have to align with management’s interest if you plan to stay that place for long.
Usually you have to be able to find compete offer to ask for a salary rise in a big bank. Otherwise, they will just tell you they already raised your pay, even a tiny 10% increase still count as a rise in management’s perspective.
My dp. One of six biggest banks in US.
Equity derivatives. Year 4 VP, last year total comp $230k.
Was told by boss total compensation expense for S&T is around same but headcounts increased as we hired a lot of quants and strats.
Bonus is no longer tied with my performance. Nowadays bonus is more about market demands. With market demand low, trader job is no longer exclusive. My boss told me that many quants supported us want to become trader to learn about trading, and they don’t care about the pay.
Even worse, my company want to reduce overall trader headcounts in next several years like our competitor did.
Can someone give some color on S&T salary progression? $200k all-in for VP seems extremely low...
I got my biggest bonuses as analyst 1 and 2. While my overall comp has risen since then, bonus has gotten slightly lower overall. I made the mistake of thinking that higher base means higher bonus, but this isn’t the case in S&T until you’re a senior VP or a director. $100k+ bonuses are quite rare unless you’re in a great seat AND you have a great year AND your desk has a great year AND your overall division has a great AND the bank has a great year!
Well, they look at the few individuals that do make that comp and think they’ll be those individuals. While in reality there is a bit of luck involved. You have to end up at the right bank in the right seat at the right time, and perhaps some folks above you leave so you can get promoted early or take over a book.
S&T pay can be higher than IB pay for the lucky few, but the median pay is much lower than IB pay. The $300k associate and $500k-$600k VP you often hear about are relatively non-existent in S&T.
I think we’re no longer fairly compensated for the risk that we take. Everything we say and do is heavily scrutinized by the regulator, and there’s a real personal risk involved with that. Moreover, our career path is very uncertain and can come to a quick stop without much alternative. For $150k-$200k it’s much better to work at a corporate where none of that risk exists.
Basically, the risk/reward is skewed against us. Having a great year doesn’t necessarily mean much anymore on the upside, while on the downside there are many career or at least bonus ending risk events.
Perhaps a way to think about it is that back when I started I knew associates and VPs that drove sports cars like Lamborghini/Porsche/Aston Martin or luxury cars like a Bentley (gently used often, but still), while these days nobody below MD has a car like that. The fact that nobody can afford those frivolous expenses anymore means comp has gotten tighter. We’re in a secular downturn.
What’s really ironic when you think about it is that traders are supposed to be good at managing risk / reward - but given the extremely poor risk / reward of the job itself, doesn’t it make you question the risk management capacities of anyone who sticks around in the job willingly? 🤔
Hmmmm, this is all very gloomy.
I am in a top BB in equity derivs.
I got around 400 vp1 and around 500 vp2, arguably these were very good year, but i know for sure i am not some massive outlier, more on the higher side though.
This year is quite dreadful so i am expecting a decent pay cut. Several directors who are head of sub-teams make 800-1m+ in good years.
Fixed income pays more than equities from what i hear.
While i agree with the mood here, 200k seems a bit low if you are on a successful desk
Based on your ID, I imagine you were year one VP 7 years ago?
Companies changed a lot over past several years. I will say the dislocation between performance and compensation happened after 2018. 2018 was a good year for many desks but not compensation.
What happened in 2018? More foreign banks leave US market, more funds liquidation, more winners take all. Industry become more concentrated. Nowadays for most of OTC products, no matter liquid or illiquid. Top 3 players account for almost more than half of market share. Cost of operation like technology is ever increasing, make it is no longer economically viable for smaller competitors to stay in the field.
Why people think things will get worse? More industry concentration.
In equity, Citadel and Virtu is keep buying their competitors while in FICC, more players exit the market and let top banks pick up their market shares.
This all sounds great to company management and shareholders, because competitive advantage then become scale and platform instead of individual merits. But it really sucks for traders since essentially there are less companies you can work for and company will no longer value you that much.
$200k - 300k for VP and $300k - 400k for D/ED is what happened to most of people after 2018. We do give new people from outside more than that number but usually through a large sign on bonus.
Overseas situation is different, Hong Kong office get paid more as relationship still matter a lot in Asia so companies need to keep people with strong relationship. In Asia, lot of things are grey but in US regulators are making market become too transparent and they want more transparency!London office get paid less due to overall disappoint EMEA performance.
The good thing is, compare to EMEA, US pay is really not that bad even it has been decreasing for years.
Automation is not a real threat for traders, industry concentration is. Especially for fixed income traders who can’t trade their product at their own at home when no one is hiring. It get even worse for fixed income job space once low yield become a new norm.
I know a lot of funds still think US will see negative interest rate in 5 years because of huge debt, just like their European peers. Looks what happened to European markets after negative yield. It is totally screwed.
Equities are no luck neither. Citadel / Virtu will only grow bigger and take more market share. Smaller players will fail and more people will lose jobs and create a huge oversupppy of job market
I miss good old days. In 2013, average performance VP in my firm could take home half million. Top performer could take home a million. Nowadays even high earner get paid less when compare to what they were paid 10 years ago.
We had MD trader who made more than CEO in good old days. In good old days, bank CEO all from sales and trading but now , banking.
In 2013, we still have prop trading desks.
In 2013, market was not so transparent, and not so many stupid reporting requirements by regulators.
2013 was such an amazing year.
I am willing to do anything to bring good old days back.
Do I still make more than 95% of people in NYC? But I am afraid the trend will get things worse in 10 years.
Then again, many fund managers say we are likely to see WW3 in this century. At that time, money is no longer important.
Am I the only one noticing most of the doomsayers are new accounts that speak in the same subtly broken English? This smells mostly like troll. If you want a realistic negative view of the industry, I would listen to koalamacro, if you want an average view of the industry, look at Coconut1983. This thread is just some fearmongering/concern trolling by some sketchy accounts.
The multi-managers like millennium are growing and continue to raise more money, while smaller funds continue to shut down. Millennium has a great business model which is amazing for the fund, but the individual pm’s are dispensable.
you can still make good money at these mm’s if you do well, but the reality is that it isn’t sustainable,90% will be gone within 3 years. Even if you string together a few decent pay days, (400k, 600k, 2mm, fired) it doesn’t look that great. MM’s are a great option for MD’s who have enough savings to retire, but not if you still need income
Industry is consolidating across the board, and if you get fired from millennium when you’re 37, good luck finding another job. There’s a good chance you’re going to be at a broker or selling fintech software for 80k +commission
once again, the issue isn’t whether banks or funds make money, its the outlook of surviving 25 years For a full career, and the compensation for the career risk. it used to be easy to bounce around to different funds and desks, now getting fired is a career ender where your only exit op is retirement
The stuff posted here seems a little too bleak imo. $200k all in is not typical for VPs (many have this as a base) and a cap at $300k/$400k for VPs/Directors also seems atypical.
I work in markets and made $210k, $225k, and $245k as an associate 1-3 and $175k base now as a VP 1. I don’t think my comp has been significantly above average.
I think less pessimistic expectations would be something like
VP 1 $265
VP 2 $295
VP 3 $325
I also am pretty sure that the directors are not all in the $300s, I think $400s is typical and some are definitely significantly higher.
The industry is definitely getting more difficult and less lucrative but some of you guys are pretty underpaid imo
Not very value-adding, but I'm starting at a T3 bank as an SA in 2021 and this just depressed the hell out of me.
Its natural not to know what you want to do when you are in college but if you have doubts go IB. Its really only a 2yr deal and then you can move on to something else. The people who succeed in S&T have no interest in IB and would never even interview for it. In my experience the people who interview for and get both tend not to do well if they pick S&T. The work, the pace and the people could not be more opposite.
Not sure where you all work but VP S&T all-in comp should be $300-500k or else you're getting underpaid. Get a bid and realize your value and then make your bank match or leave. Base salary is usually in the range of $175-250k (unless you work for some of the bulges whose upper bands is c.$200k) and bonus should be at least $100k if the bank/desk/you have had a good year. Bonus pool at Jefferies is +25% this year and a high performing VP in S&T is set to make c.$400k, that also includes sales, not just traders. If you are making below $300k as a VP in S&T the issue is your performance or refusal to realize your value elsewhere, and the bank will take advantage of that and underpay you, as they should.
For some products, especially those exotic derivatives trader, it is really hard to move. It is a really niche skill, and most of places don’t do it nowadays. The career mobility is really bad.
Really depends on firm. If you are in a flow desk then pay probably not really good, but if you can work in a prop desk then probably better. BNP for example is more close to prop than flow. Foreign banks are exempt from Volcker rule. They also have less capital requirements. That’s why in general they tend to pay you more compare to famous BBs
This thread is ridiculous and shows me why you’d have to be a total idiot to work in s&t
It’s so competitive. It’s a dying industry. And you guys get really fucking small bonuses.
Anytime I meet someone that works in s&t at a bank I generally assume they are incapable of doing their own research or thinking for themselves. If they did any reading they’d pretty quickly realize it’s basically one of the worst deals imaginable.
The difference between this thread and what the industry was like in 2006 is crazy.
Wait for biden to come with his tax hammer and it won't even matter if you make 700k.
As usual people who are already wealthy are not impacted or get richer through asset inflation.
Poor people get handouts.
And high earners get stuck with the bill. These salaried high paying jobs make less and less sense every day.
Either live some chilled life with a reasonable job, or create your own company.
Yes! I feel it is crazy how people are brainwashed to vote for Biden!
Trump is the better person for banking industry!
He supports lower tax and will lower capital gain tax in his second term!
He supports deregulation which will allow prop trading!
He supports restricting foreign workers which means more job opps for American!
I found this article today: "We earn >$700k. We can't afford to live in NYC under Biden"
Can you imagine? No matter how much you earn, you will be get penalized just because dem people think you are rich! Crazy thought!
Trump four more years!
Sounds like that won't be a problem for most of the S&T industry based on this thread.
I find a lot of the numbers in this thread a bit surprising. I work on a credit desk as a VP2 base of 175k and would expect bonus of 375k or so this year ( good year but not ridiculous).
the largest producing directors/mds on my desk will be easily clearing 1-2m and maybe a little more for the stars.
Pay definitely getting more varied depending on the desk, I.e it’s going to be hard to make much on a spot fx or cash equity desk.
This is more inline with what I’m hearing. I’m associate 3 / getting promoted this cycle. I think maybe the disconnect is in order to make real money you need to be on one of the desks that’s still interesting. I would think it’s something like the below...
Very Good Pay / VPs break 1mm if good: securitized products, credit derivs, macro derivs that aren’t vanilla flow, high yield or distressed credit, legacy prop desks and other small niche desks that aren’t well known
good pay: IG credit, flow macro products where you take prop risk
numbers everyone is quoting above: equities, sales, sales-traders, any flow desk where you’re not adding decision making value or taking real risk
These numbers seem insanely low to me, personally. I have decent color on Associate 3 and VP1 and VP2. I know Associate 3s and VP1s who were top performers and admittedly had their own P&L to their name but made 600k and 700k last year, respectively. They had good years but nothing amazing like others have mentioned. These are all people at tier 1 BBs but still. I think VP range should be something like: 300k low end / bad desk, 500k if you have decent P&L to your name, 1mm if you're a rockstar and made substantial money (20mm+) for the firm. The ED/MD numbers are also insane. EDs on desk that make good P&L where they themselves make up a high percentage of that P&L are easily clearing 1mm, and MDs on those desks should be over 2mm. All of this is specific to Fixed Income traders (not sales), but still.
Don’t worry about bonus. The massive layoff is coming in next two years!
Dude shut up already. Quit spamming every s&t thread with this garbage. GS is cutting 1% which brings them to a total cut of 2% for the year, and it is not just s&t. They cut every year this isn't unusual......
Why waste time discuss sell side bonus? They all suck! Join buy side, you will make ten times more, like at least 7 digits if you are good. If you can’t make that figure in buy side in 5 years, that probably means you suck and shouldn’t even stay in this industry! You ware wasting everyone’s time!
I would bet a decent amount of money that you are a college student, or trade options in RobinHood and have your LinkedIn headline as "Leveraged Non-Linear Product Prop Trader at Family Office" - when your Family Office's AUM is the $1,200 stimulus check.
VP 6
US Bank
CDS
Base 220k Bonus 50k
No promotion because too many EDs in the team.
2nd Year VP / Tier 1.5 US Bank. Equity Derivatives Flow Trader / Base 200k / Bonus 10k
Super angry. Told my boss go fuck himself and quit job
VP2, IRS Desk. Base 175k,Bonus 50k. Not a big number but doesn’t matter since I made 200k in my PA last year lol.
My PA profit is almost same as my annual comp now. Haha.
Same here. Had an amazing year for my PA. Usually cheap deep OTM options don’t perform so well. But last year was an exception. My PA grew from $100k to $1M in one year. Crazy year...
If you're worried about your TC, the easiest way to improve your pay by at least 250k is to post under a real username instead of VP - Equities and VP - FI (both with the same broken english.) Move along, the troll is back.
Its really hard to save enough for retirement b/c most people don't last long enough. The 1MM+ pay days don't start to come until you make MD which is not going to be until you are 35 at the earliest (assuming 3yr at each level, my experience is that you get moved up every 3yrs as long as you are profitable but making that next step to MD can take longer) for most people its not until late 30s early 40s. You start to get to that danger zone for getting laid off once the late VP years hit. So lets assume you are making the below comp ranges
Analyst- 135-175
Associate- 200-300
VP- 300-500
Director- 500-750
MD- 1-3MM
That works out to around 4MM pre-tax after 3 years as a director, after taxes that is about 2.5MM and some of that comp is going to be deferred cash or stock (generally starts around the VP level), so its closer to 2MM, now you have to live so you spend 50%, which leaves you with around 1MM, you have been investing and return about 9% annually (low return in recent times but lets be conservative), so you are sitting on about 1.5MM. Lets say you get laid off after your 3rd year as a director (most don't last this long) and they pay you out the deferred, so you looking at around 2MM net worth (not counting retirement accounts), you have spent 13 years doing this job and are 34 years old. You have a very nice cushion but you are going to need to work again, and since you most likely have a young family to provide for you are going to stick with what you know which is S&T. For some people they can find another seat quickly that will pay them the same and that is great, but for a lot of others you can't and you go into "cost covering mode" I just need to cover my expenses for a while and let my investments do the work. Basically you are hanging on to another seat that on the surface will pay you 50% of what you were making before and hopefully has some upside (seat at a smaller dealer on hard dollar or lower tier BB where you have a better chance of making MD) but in reality you are hoping to stick around long enough to get another shot with a Tier 1 BB as those seats tend to be the highest paying seats for most people.
Now lets say you manage to last 20 years in this business and you spend the last 6 as an MD before getting laid off. That works out to around 15MM pre-tax after 6 years as a MD, after taxes that is about 8MM and some of that comp is going to be deferred cash or stock (generally starts around the VP level), so its closer to 7MM, now you have to live so you spend 50%, which leaves you with around 3MM, you have been investing and return about 9% annually (low return but lets be conservative), so you are sitting on about 5MM. Lets say you get laid off after your 6rd year as a MD (you are in the top 1% of the business at this point) and they pay you out the deferred, so you looking at around 6MM net worth (not counting retirement accounts), you have spent 20 years doing this job and are 42 years old. You still have the family to support but walking away and looking into a different line of work that is less lucrative or taking a chance on something with big time upside become very real.
The math is not perfect but I think its pretty close and I think paints a good picture in terms of what earnings can look like in this business
I agree with the numbers but if you blow through 50%+ of your income at ED-MD or even VP level then that's a conscious choice.
And you can definitely "retire" or work on a low pay fun field on 2-2.5m$. You don't have to live in new york once you are out of finance...
You can generate more than enough investment income to feed a family with a very decent lifestyle in a medium COL area where you'll probably have a better lifestyle, keep yourself busy with some random interesting activity, or start a business with 100k out of the 2.5m$. Of course you can try to find another job in finance if you enjoy it/want the income/whatever.
But if you can't figure out your way through life with 2.5m$ cushion you have deeper problems than it looks.
Discussing bonus here is pointless. It’s not like you can ask your manager to increase your pay just because of a untrustworthy WSO number. If you are unhappy with your pay, move somewhere else. If you can’t make the move, then don’t compliant. If you really hate the place you work and want more money, go find some misconducts in your company and report them to SEC for the whistleblower money.