Sales and Trading Bonueses

Just wondering, anyone has any ideas that usually on average how different are the bonuses of Sales and Trading people from IBankers of M&A?

is this S&T Spreadsheet?

If your money hungry, and love all areas of finance. Where would you go; M&A or S&T? Hours do not matter.

Out of curiosity, do S&T analysts ever travel?

S&T analysts get less than ibanking, S&T Associates are prob about the same.

I take it that S&T has better hours than M&A....But I have heard of many people in S&T working the same hours as M&A any truth to this?

No truth. Think about it. S&T jobs revolve around market hours. When are the markets open? Throw an hour or two before the open and after the close and that is your day! 7am-6pm is common.

Trading salaries if you are good are much much higher than M&A. The best paid traders had bonuses of $30 to $40 million last year.

anyone recommend any books to read to get an idea about the profession? Also, where should you be looking to start (position wise, not company) if you have an undergrad degree from a non-target, high GPA, good extra curriculars/ volunteer work, but not necessarily the strongest directly applicable internships?

At the analyst levels, the money is virtually the same. However, this changes later on (if you're good), as the top paid guy in a bank is almost always a trader and not a banker.

the bit about an analyst trader potentially getting more bonus because of what he could bring to his firm is bogus

Most prop traders take home 20% of what they make. Sky's the limit.

a prop trader? Obviously you have to be good as hell at what you do, but what is a "typical" (I use that word loosely) path to becoming a prop trader? Number of years/degrees? etc etc

i find it hard to believe that you can reel in $140k your first year out of college fetching hamburgers for 40 hrs a week, but i'll just have to take your word for it.

Fearing that you chose the wrong career path? Have fun slaving away for less money.

Just read a bloomberg article in the "agenda" section. It was reported that the top energy traders at MS and JPMorgan (Olav Refvik and George Taylor respectively) took home at least $10 mil in 2006. That compares with about $1.5 mil for top bond traders.

One thing's for sure...trader's bonuses are definitely way more than ibankers's.

It was reported that in the l999 and 2000, Frank Quattrone of CSFB made almost 500MM.

Last year the top trader at goldman made $45 million. And your right, most people dont make that much but on average, good traders make a lot more than good bankers. The trading department brings in a whole lot more revenue than M&A.

According to the 2005 annual reports of both GS and Lehman, trading revenues account up to 70% of their total revenue. Furthermore, on a per employee basis, traders definitely bring in more revenue than ibankers.

Just quoting off GS's 2005 revenue figures: Investment Banking: US$3.67 Bn Trading and Principal Investments: US$16.36 Bn

For Lehman's: Investment Banking: US$2.89 Bn Capital Markets (Trading): US$9.81 Bn

Do people switch between being an ibanker and a trader after entering any 1 of the fields. Like be in M&A for a year, and if they dont like it switch to S&T

no he fuckin didnt. Frank quat. made 100mm at the height of his days. fuckin idiot, no 5oomm/year.

Agreed. 1st year TA's do not get 140K. I would bring that number down 20-50K.

agree

agree

agree

do you guys think there are huge differences in bonuses between the equity desk and the fixed income desk? what are the sales bonuses like in equities or equity derivatives?

for a 1st year analyst

In nearly every bank fixed income blows equity out of the water. With equity derivs you might be a little better off, but straight equities is where they send the idiots who can't cut it. As an example, look at all the finance Phd's coming out of all the top b-schools into structured FI trading; now try to find one on an equities desk.

You said Equity Derivatives are better off. Just how bad are they?

jim cramer was on equties, enough said

What about structuring CDOs and credit derivatives? What's the best way to get in this field and what does the bonus look like for 1st year BAs?

Seems like S&T is the way to go, thanks.

equities are where all the jocks are. you don't need any sort of finance backround to trade equities. ED's are a different story though, plenty of quants in ED's.

Don't think about bonuses...think about profitability and how you can contribute.....the best traders these days are hardcore quant types who live and breathe trading, mathematics, quant research etc etc. Those king bond traders are math geniuses who have figured out an arbitrage that noone else can see (espescially the FI OTC derivatives boys and their exotic models). The P&L on these highly customised and illiqui deals is mind boggling and very sustainable....Increasingly trading is becoming the domain of quants and computer scientists....the cowboy days are nearing an end...quants with high level risk management abilities will rule the roost.

A friend of mine is trading derivatives in London @ BNP Paribas... he took home Eur15MM last year. The year before that he was north of Eur8MM. Pebereau himself (CEO of BNP Paribas) has to sign for his compensation package... He's one of the top 3 dogs in his department though.

I agree with not thinking about it, but for what it's worth it really is about 5-10k less than banking....total comp can therefore be 140K. And if you're on the right desk or smart enough, most of the time wont be spent getting food.

Additionally, being quant is great and all, but not all traders are quant. There is a fine line between being a good number cruncher / model builder, and being the head of a desk. The latter requires more personality/leadership skills, and some firms are willing to sacrifice raw math skills for the softer techniques. That said, being good at math is really, really important nonetheless.

Do MM traders get bonuses equivelant to that of their corporate finance counterparts?

I completely agree that the quants are taking over, equities are a much harder game then it was even 2 years ago esp as markets are moving electronic these days. on that note, right now i work for a small group of prop floor traders, i accidently saw their tax returns from a few years ago and it was mostly in the 3-10mm range, it is significantly less this year think under 1mm....not good for me since I'm a TA that just started with them this summer :(

The analyst ranges are the same, ibanking can be say 5k higher which is irrelevant. Where you fall in the band can cause some variability in your actual number.

at the undergrad level, when getting an internship is it necessary to have taken numerous advanced level math courses in order to get placed into FI as opposed to equities?

at the undergrad level, when getting an internship is it necessary to have taken numerous advanced level math courses in order to get placed into FI as opposed to equities?

but it would help you.

It's great that this board is here to help people think about career paths, but there is a ton of misinformation here. Here's the basic lowdown

analyst salaries: sales and trading bonuses for bulge bracket positions at the analyst level are almost exactly the same as corporate finance

associate salaries: here's where the differentiation starts to open up depending on your position and how you're doing. traders> --If you're a trader, your salary is going to be based on your utility as a market-maker and on your P&L. for a first year associate on a desk with decent flow and couple bucks in P&L, between 250-300. --as your P&L scales, your salary will follow approximately linearly. there are definitely associates who will make over a million, but that of that as the 5-10% tail of the distribution; it definitely helps to be in a less commoditized product area sales & research> --if you're a saleperson or in research your take-home is going to be more or less in line with banking

vp salaries: --here's where the variation becomes much more significant. while you have a much better sense of how your salary will scale in corporate finance, in S&T it will depend highly on your P&L, which goes for sales and trading --an average trader in a mature market will have a good amount of variation in his salary year to year, but will probably see it swing somewhere in the broad band of 300k-1000k depending on their p< numbers improve for less commoditized products and of course for top traders the sky is the limit --an average sales person in a mature market will see take home pay between 400-600k while a top salesperson might take home a million; in less commoditized product areas they might see 1.5-2mln

trading responsibility: --contrary to some suggestions, analyst traders are not lunch-fetching monkeys. that doesn't mean you will never get lunch, especially in your first few months, but most analysts begin executing transactions and taking on risk within the first year of starting

Thanks dr2899; I just got a job in sales in Asia/Pac, and it's nice to see good info here.

Looks like I'm working my arse off to climb that ladder...

top sales ppl on any desk can make that much. and commodities are not a structured product.

Salary + 5-10% of P&L for prop traders is the norm. Of course in your first year you are not going to be given that much to trade so you should be expecting salary plus small bonus. I've known people who were promoted to VP after one year - conversely I've known people at my former BB who were kicked out after one bad trade.

At my HF we pay our first year research analyst roughly $55k (depending on $/£ exchange rates) plus a (very small) share of the firm wide profits. After a few years they get a much large perecentage. As a point of ref I got a very comfortable six figure basic and about as much again in bonus last year bringing me very close to a bar.