2009/2010 Bonus Estimates
Very interesting (albeit depressing) predictions. Sorry if this had been previously posted, but would love to hear other peoples take on the matter.
YM
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That's almost a year old...
much has been made about last year's decline in bonuses at BBs. i'm curious to know what the elite boutiques paid? anyone know what the top tier bonuses were last summer at Blackstone/Lazard/Greenhill/Evercore/etc.?
Per M&I:
"* 1st Year Bonuses: $60-$70K * 2nd Year Bonuses: $80-$90K"
Seems reasonable. I'd expect 55-65k.
2011 Bonus Prediction/Wish:
1st year, top bucket ----> $80k
That would be grrreat!
^Oops, that's the one I meant to post. Thanks drexelalum!
If those figures are accurate then Avergae Joe analyst is looking at over $100k in his first year, right? Why the fuck would any self respecting organisation give $100k a year to some kid straight outta college?
LOL, I can tell you're new here.
$100K is on the low end to be honest. Base is $70K + 10K signon + $45K bonus = $125K all in.
My parents have been working like slaves for 20 years, and their yearly income together is about $60K. I cant understand why banks would give $125k a year to someone who's barely left puberty.
It's called high finance. The disparity in salary has nothing to do with work ethic or age, but the nature of the industry and the money flowing through that industry.
Banking's primary costs relate to compensation, which relates to it being a large scale service industry. Being that the objective is to execute deals and make commissions/spreads on these lucrative deals, it all hinges on performance. In order to make money, they must perform well. In order to perform well they must retain talent. In order to retain talent, they must offer competitive compensation (relative to the industry as well as to build large-scale demand for employment). Aside from that, $100K/year in NYC or the other major markets basically allows entry-level FO employees to live comfortably but not luxuriously. With that being said, IB offers high entry-level pay for obvious reasons; they want to attract top performing college grads...so how do they do that? Offer a limited number of high paying positions.
The same reason biglaw can justify paying $160k+bonus/yr to someone with the social skills of a retarded walrus, no practical knowledge, and a top 14 law degree, in an oversaturated profession with a median income of about $85k and declining.. They pay for what they perceive as talent.
GS top bucket hit 80K. Likely banks will match.
Zweihandler,
Two main justifications for the high pay - cost of living and hours worked. Manhattan is an expensive island to live on, and when you're working 120 hour weeks - it makes things unworkable if you live out in Queen's or in New Jersey (there isn't enough hours in the week to commute). Another factor to the cost of living is the high taxes. In NYC - you pay federal, state and city tax. Yes, $125k could be the gross - but really, the government takes half, you keep half. During my first year, I lived in a fringe area, and converted my living room to be a bedroom to a living room. I paid $1,550 a month (rent was more expensive then) - which brought rent + electricity to $20k / year.
I would argue that the amount of work done by IBD analysts are similar to working 3 full time government jobs. I've worked 120 hour weeks with constant pressure and deadlines.A government 40 hour work week is at a much more relaxed pace. I didn't take hour long lunches or long coffee breaks - my friends in Washington did. In addition, the bank saves the hefty benefits costs (only paying for 1 employee vs. 3) and providing less generous packages. Although the benefit cost is debatable as many local governments don't need to fund pensions, they simply just write an IOU and let the next guy deal with it. The IBD pay works out to be about $40k per full time government job, but after factoring the different tax rates, the real pay is in the low-mid $30k range. Pretty sad.
The way I would describe it is, people fresh out of college slaving away trying to afford Manhattan and trying to learn a few things in order to make more.
don't be stupid.
no one would do IB for 70k all in with the hours. that would be a terrible deal for anyone stupid enough to take it. that'd be like less than a 35k/yr job if you did it hourly. not to mention all the bitching you have to take
70k all-in for those hours? ops please!
Zweihander, I'd be more than willing to take the additional 65K off your hands if you want to work for 70K all in. PM me and we can work something out.
The bonus is really just how you percieve it - you can argue that you think $125k is too much for a recent college grad, but when I was in banking, and doing the 100-120 hour weeks, all I could think about was how this was only to be justified by the bonus. I am not some money grubbing clown either - but I think when you're under pressure and stress, you think of anyway to validate what your'e doing. The few superstar lifers in each class are the only ones I think who don't even need a bonus to validate what they're doing - they just flat out love it.
how about top boutiques? Will they be equal to or more than MS/GS/JP?
historically it's been more, and i heard that last year the elite boutiques were way above BBs, but i haven't been able to confirm this with anyone. doesn't seem like anyone on this board knows what the actual bonuses were at these places.
Are the starting salaries roughly the same for boutiques and BBs in the US?
^ No, boutiques will vary widely given the deal flow they get. BBs are typically uniform for analysts in terms of base.
simple demand and supply theory, lol...
like what eric809e said, you're basically working 3 times the hours of a normal government worker, no surprise you should get paid 3 times as much. Moreover, if you calculate the per hour wage, it's really not that much... just the absolute value amazes people.
It may be hard to comprehend @ first, when i was trying to break in, i thought it was a typo, but after all the glamor to those who don't understand the industry, you'll know those MDs make you work for every dollar they pay you.
okay cool thanks guys.
Zweihander,
If you think WSO is so "fucked up," what are you even doing on here? You're not about to change any of our minds.
^More importantly, if you look at it as an hourly wage, analysts make no more than the average worker ~15/hr. It's just that we literally work two jobs
Elite boutiques pay way more than GS/MS/JP.... Evercore 75+17.5 Greenhill 75+10+10 stock option Rothschild last year 75k bonus... Centerview 75 + 10 + carry on investments on PE side... Bonus numbers at least 10-15% higher than the highest paying groups at BBs.
^That is completely unfounded, especially if you look at some BB satellite offices in Canada. CS and MS pay way more than those guys, especially with the dollar at par!
bunkerbanker, i've never heard of that and am calling you out on your bullshit
I wouldn't. He makes a couple of sweeping generalizations but is dead on for the most part.
Moelis?
none of those boutiques are elite, especially not moelis.
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