Hi guys. It’s that time of year again. We’ve just got comp paid out and now it’s time to start thinking of the cut that we should pay on to our MDs via the annual tip to thank them for another year of opportunity in this industry!
I know the analyst suggested tip is generally 20% of pre-tax bonus. But what are you guys paying in the VP bracket? I was thinking of lowering the ratio this year to 15% of my gross bonus comp, but want to seek guidance to ensure I’m not off market.
Keen to hear how much y’all are tipping your MDs this yr from a % standpoint.
Honestly it should depend on your living costs. Once you have food, water, shelter and tax paid the rest should go to the MD. You won't succeed in the industry by being stingy.
Wait, you are giving part of your comp to your MD ???
Yep, you wouldn't be where you are now without your MD. It's called showing respect and gratitude.
Bro I pay them back by working for them and generating alpha for them it’s just wrong to give part of your comp to your MD
Is this a real thing in finance? Are people really giving their MD money or they mean the MD is restraining from giving some bonus to the person below them, so them keeping the money is you "tipping " them.
What if said MDs couldn't sell sand to a desert?
You guys got bonus?
50 to the MD, 20 to the CEO, 10 for each VP in your group, 5 to each associate. It’s Ok to take a loss in the first 10-20 years.
Dang respect bro - maybe I should just pony up 100% of comp this year. I was considering helping my parents fund my brothers college tuition. But you bring up some good points, I think the CEO of my firm is more deserving given all of the value we generate for the economy and the jobs our business creates.
Yeah - gotta consider priorities.
Thinking about leaving em a 10% tip this year. It’s a down year overall, my job security isn’t great, and I’m not that happy with their service this year. Wanna remind everyone that even if it’s not much, your MDs still get a 400k base salary. The tip is only for doing a really good job.
Got 90k post-tax bonus and thinking of giving 15k each to my two MDs, is this in line with everyone else? Can I get away with no tip to SVP?
It's okay to not tip VP, as long as he is not your staffer
I’ve always tipped the staffer 5% until I became a VP. Keeps you on his good side.
I really don’t know if this is a joke. Why would I give money I need to survive in this city to my boss making millions for a decade now. No one at my firm gives the MD shit except a nice bottle of wine around the holidays.
What about the MD's rent/mortgage and car payments? You have to keep in mind that their routine expenses are likely orders of magnitude higher than yours, so they may even be living paycheck to paycheck. As a financially secure individual, it is your duty to help those who are less fortunate than yourself. Especially when your success is only a result of their hard work. This warrants a tip of at least 25% TC. Don't be stingy.
Sounds about right
Lol
I haven't started as an SA yet, should I tip anyway based on my expected salary? Wanna show I'm a team player
Definitely bro. Even if you only have $50 to your name tell your MD this and offer it to him as part of the tip.
He knows how to leverage that $50 more than you in order to benefit the economy. Classic trickle down economics my guy.
Should I take out some debt to tip my MD more than I'd otherwise be able to? He's been an excellent mentor to me.
Have you heard that parable in the Bible about the woman who had nothing and gave Jesus her last bit of money, versus the rich guy who donated a bunch but was still rich? Guess who’s going to heaven???
IMO your MD will see your contribution as more meaningful than an analyst who only tips 10% of his income.
Really makes you think
Absolutely. Zelle his work number tomorrow. He'll appreciate it and it'll pay dividends come this summer.
Okay okay, jokes aside. Is this tipping culture existent in UK/European banking? Or is it just a US thing
I see no reason why being a good human being isn’t universal
Relax, even cultures that share the exact same values could have radically different ways of expressing said values (the anthropologist/historian in me speaking 🙂). So I'm curious about if it exists in London
One of our summer analysts last year didn't contribute to the tip pool for the MDs, he did not get an offer.
Great topic, hah. The reality is everyone knows in S&T you tip your MD. One of my better years I got paid more than my MD limited tipping. The following year I had to tip the MD, CEO, MDs kids, heck maybe the janitor (it was a tough year for the firm gotta keep everyone in private school).
Wait I don't know if this post was a troll (please please tell me if it is) but I am a current second year analyst and didn't tip anyone during my first year. I signed a check for 5k (my bonus was only 30k) and dropped it off at my MD's desk this morning, he just called me in and asked why I did that and told me that it's not necessary. He looked extremely baffled during our conversation so I'm not sure if I offended him at all. I took back the check but I'm pretty sure he now thinks I'm some idiot. What should I do???
There’s no way this really happened. If it did, I salute you, Doofy.
Usually I expect a tip of around 14% from my direct reports. This year, probably only around 8%.
Not normal for anyone outside of direct reports to tip.
Does anyone have any insight into what split between your MD and landlord should be?? I usually try to tip approx. 35% of income in addition to rent to landlord, but am worried that tip to MD will make me have to take out some additional leverage to make things work
Sublease your apartement (you can always sleep under your desk), and use the proceeds to tip both. I will say that 35% is a bit generous; how will you have enough left to tip the government ?
https://www.pay.gov/public/form/start/23779454
OMG I never noticed that, will tip my remaining after-tax income to the government immediately. I apologize for freeloading for so long. This is clearly the solution to the chronic government deficit.
This is truly my favorite fucking thread
Does this practice exist in Europe too?
Every single year, gullible American analysts go into the MD tipping thread and somehow manage to fall for it. Tipping is ingrained into your instincts - stiffen up lads.
Had an A1 last year tip his MD 10% of Comp. Rationalized it by saying he was afraid layoffs were coming and that he wanted to tuck most of his bonus away in savings.
Let’s just say that act of stinginess got that man a nice job at Panda Express
Wow is this Europe or US? 10% is small?
Does anybody here know what the cap for tips is that is set by compliance? When I was in college and working for the college we couldn’t accept “gifts” (tips) of more than $250. But that was for broke college kids. For finance analysts who have deep pockets it should be around 5-10k right? Obviously you can give more under the table but just want to make sure I’m generous enough but don’t run into issues with compliance.
I'm tipping three tranches in 40-day instalments @ 10% of base
This guy dollar cost averages his MD's tips. Smart guy, good advice.
h w g lv l l h we w bu
In commodities it's customary to arrange for delivery of 1 lot of your underlying at your MD's house.
does the average freezer hold 40k lbs of pork bellies?
A good MD would send that driver to the nearest consumer with a few phone calls, turn that into cash.
No
Is this tipping MDs thing purely in the USA? I’ve never heard of it. It sounds awkward af & a bit like bribery… would it even be allowed?
Next question is, can someone please explain the logistics behind this? Venmo? Bank transfer? How do you get their details? Do you write a card? Do they tip you too for your hard work or nah?
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