27 years old, making $200K+ with 45-50 hour week in regional corporate banking - do I switch to IB "for the future"?
All,
Curious of the opinion of some of the more tenured folks here. I'm at a regional corporate banking/commercial banking group at the associate level with not amazing brand, think Capital One. I like my job, and think I'm paid more than well for the work I put in with $200K+ all in on a 50 hour week.
The Career Dilemma
That being said, I look to the future and think that future upside is very limited in both career progression and pay. We are by no means a leader in the space, do not lead many deals, and I don't think compensation scales up tremendously...For example, I know VPs 10-12 years our of school making similar amount and also not building client relationships.
So in sum - I feel like this is a very cushy job now, but every year I stay here, I get older and my opportunities narrow. I've had some solid inbound calls from lev fin groups at IBs like Jefferies and RBC, but the pay is not much better, and my hours would basically double? The flip side is, I feel my future opportunities and network would expand by multiples.
Am I crazy for giving up such a cushy job, solely for some unclear future opportunity?
Career Guidance
While it’s impossible to know what the right decision is for someone else, reaching out to more experienced professionals in your target industry can always help. Here is some input from the WSO community on whether OP should stay in corporate banking or try to make the switch into investment banking.
Reasons to Leave
- Limited upside in terms of pay
- Better upward mobility at other firms
- Need to broaden network
Reasons to Stay
- Decent pay for amount of hours
- Good work/life balance
- Current opportunities have similar pay but double the hours
Other Career Options to Consider
- Stay in current role and use additional spare time to build a start-up or take on a side gig
- Switch jobs within current company to gain additional experience and knowledge that will lead to more money either at current firm or another one
Need some career advice?
Check out WSO’s Mentor Service. With a network of more than 200 mentors with diverse and industry-leading Wall Street experience, our service can pair you with a mentor who can help you break into the industry of your dreams or advance in your current position.
" We are by no means a leader in the space, do not lead many deals, and I don't think compensation scales up tremendously..."
Why not shoot for another corporate banking role at a bigger/better bank with more upward mobility?
I think you hit some of the points about IB correctly, but VPs (also ~10-15 years or so out of undergrad) in ibanking are also not leading deals - they're managing deal teams. Your hours would double and you'd be throwing away your institutional credibility.
As my parents say "There is always room for improvement." When you make 6 figs, you want to push yourself for more especially at a young age.
With that income and those hours I'd say you're better off working your current job for the average 50 hours a week and then supplement in like 30-40 hours of working on your own start-up/someone else.
You have the bank roll & the hours. Why take the pay per hour cut.
i know corpbankers who work way more than that... it is by no means standard to work 45h/week
I am just an analyst, so not one of the "more tenured folk", but I would happily work a job like this. Money is important, but 50 hours a week for $200,000 is a good deal. Good luck in whatever you decide to do.
always think ahead... if there's no career progression and you don't see yourself retiring from your current organization, its time to leave.
Start building that rolodex. If you're a VP without connections your arent doing it right. As far as what to do, personally, I'd start a side gig. If that isn't what you want then consider a bigger bank in your space. Maybe go to a credit fund in the MM. Or try for a DCM job. All would be within range.
It sounds like you have a beautiful thing going, why ruin it?
If you're in a production role at your current bank, you could probably consider switching to the credit side to get some additional experience. If you have experience doing production and credit, you could likely raise your ceiling for pay/advancement within your current institution.
Just remember, almost NO ONE is absolutely content with their current job. There is always a better brand name, pay, title, location, industry, work-life balance to be chased. I don't have much advice further than what I stated above, but your situation is definitely a good problem to have.
I was in the exact same position as you, except I am a little younger. I decided to take the leap and transition into M&A. Although it has been a small pay cut so far, the work is much more enjoyable, I'm working alongside smarter people, and my exit opportunities are much more promising and lucrative than where I came from. The pay ceiling is very low in corporate banking, so be mindful it's much harder to scale comp once you hit ~200k.
I figured I could always go back to corporate banking if I flamed out in IB, so it has been nice having that fall back plan.
Good luck either way.
Guys, OP here, responding to answer some of your questions/follow-up. First, surprised at some of the above implying 200K is good enough etc. Aside from the always pushing for more aspect of many of our personalities, to be honest, 200K-300K is not enough in a metro area with 2-3 kids in the long term, if your wife doesn't really make $$, and if I want to max out 401K, pay for 2-3 kids college educations, buy a 750K house, lease 2 non luxury cars...generally live an upper middle class life. That's aside from the fact that you would be waiting for your bonus to bring you out of the red every year. Trust me, I did the math. Also, given the hours worked to compensation ratio, I wonder how sustainable this gig truly is. My peers here don't make as much, and with a combination of luck in my group, and outperforming my under performing peers, I think I'm being rewarded by my superiors...at least for now.
Some of my peers have moved to CLOs and BDC type funds, so that's certainly an option, but if that doesn't materially add to my career profile long term and offer a compensation uplift now, or great upside later, then that switch doesn't make sense to me? It doesn't seem like it does unless at a top BDC.
Maybe it's naive, but it seems like a good way to make sure your compensation and career trajectory gets lift (at least thinking, okay I'm almost 30, how do I build up a career over the next 15 years) is to join a strong brand/group - not necessarily M&A/Lev Fin, but a role that you can BUILD YOUR BRAND around. Bulge Bracket or top boutique looks like a good way to do that. Is it worth the double hours worked in the short term? I don't know...that's what I'm trying to evaluate.
If you are making $200k per year, your income is higher than 95%+ of earners in the US. If you can't live comfortably on that, then you are doing something wrong.
OP, while I am a junior, hopefully I can provide some perspective on corporate banking at a top BB and dispel some notions in regards the grass beinf greener. I am in an industry vertical at a top3 BB on the credit/portfolio management side. We do the underwriting and monitoring for all deals and portfolio management functions, typical corporate and investment banking structure. We lead a lot of deals in our space or are tier 1 in the bank group but honestly that does not really impact the work I do at my level, the underwriting is the same whether you are JLA or a participant. Also by the sounds of it your pay is much much better as associates here so not make 200K all in, more like ~150K all in for an As3.
At a very large bank, the culture is very role driven and it's not really possible to move up quickly if you are a rock star. Top analysts still take 3 years to make Associate and top Associates take ~3 years to make VP. Becoming a director is a very political process from what I have seen in my group and its more about how many MDs like you vs. how good you are. In fact plenty of directors have left to other banks as there were too few MD ttiles to give out and it hurt these folks in front of clients when all peers from competitor banks were at the MD level. From what I have seen personally, it's better to be a big fish in a small pond vs. being a cog in the machine. You are relatively young and you can always go the MBA route and do something else or up-tier to a better bank. The other thing to keep in mind about IBD is your pay to hours worked is going to be awful in comparison to your existing role. You will make less than 50% from what you are making now but will work 2x the hours. To each their own but from my perspective, what I really enjoy about our industry is the mix of challenging work, great pay (really second only to IBD and high finance jobs), reasonable hours, and long term potential to advance (MBA not required either). This is at least why I like what I do, others may chose to disagree.
Also are you on the credit/underwriting side or in coverage/relationship management? You could definitely move over to coverage and be able to move up more quickly as you are responsible for revenue generation, assuming you would be able to being in the fees.
Thanks for this. It's quite surprising the pay is so low at a Top BB in corporate banking. What are the type of deals you work on? I presume middle market 1st lien/2nd lien type deals? I'm on underwriting side, but generally the relationship management side if just more senior guys who developed relationships with sponsors/companies over the years and solely became dedicated on bringing in deals. Trying to use my Rolodex to bring in something...
OP I think @"gregt14" would be the perfect guy to chime in here, he makes north of what you quoted doing commercial banking at a regional bank - perhaps he can chime in on smaller vs. larger institutions and upward mobility.
Also pay does not have to flatten out in CB - if you switch to a coverage/production role your bonuses will get much bigger as you bring in fees.
Would you mind describing your role, coverage universe, deals you work on some more so we can get a better feel for the experience you are getting?
OP I think @"gregt14" would be the perfect guy to chime in here, he makes north of what you quoted doing commercial banking at a regional bank - perhaps he can chime in on smaller vs. larger institutions and upward mobility.
Also pay does not have to flatten out in CB - if you switch to a coverage/production role your bonuses will get much bigger as you bring in fees.
Would you mind describing your role, coverage universe, deals you work on some more so we can get a better feel for the experience you are getting?
Maybe I'm getting confused with how corporate banking is structured at a BB since we aren't a full investment bank so aren't structured that way. Please correct me if I am using the term corporate banking incorrectly. My space is really middle market commercial lending. Players in the space are GE Capital, BMO, SunTrust, CIT, KeyBank, PNC, NXT Capital, Fifth Third, the middle market groups of Bulge Brackets, and now the BDCs. We lead some deals, but participate in most, as I believe the majority of banks do with the exception of the top. Generally bank debt 1st lien/2nd lien on companies with EBITDA of $15MM - $100MM. Associate on the credit underwriting side.
To me Corporate Banking means relationship banking for large corporates - threshold varies a bit depending on the bank but I would say revenues above 1Bn.
All of our companies have revenues in excess of 1bn, quite a few revenues in the 20-50bn range and EBITDA in the low billions for quite a few of the companies I cover. I also cover a few companies with EBITDA in the 500mm-1Bn range.
I consider commercial banking as banking for middle market companies with revenues from 100mm - 1bn being the highest, so on average I'd say you'd see companies with 200-500mm revenues in this space.
With that said, I personally do not think it matters on the size of companies you cover but how your bank, and most importantly the pay is structured.
BB corporate banking structure mirrors the investment banking structure of analyst > associate > vp > director > md with vps/directors being credit officers and having signature/approval authority and managing a portfolio. You spend 3 years as an analyst and 3 years as an associate and get an annual 10k pay bump.
Commercial banking on the other hand does not have the fixed role progression as the corporate banking structure does and uses different titles. Generally analysts do portfolio monitoring and admin type tasks, underwriters do the credit underwriting and there are various levels of seniority here, and credit officers own the credit relationship (most similarity here with vp/director in corp banking). Commercial banking does not have the fixed pay bumps either and you can spend years as an underwriter while in corp banking your peers will be getting promoted each year and getting a big pay bump while your pay bump will be 2-3% outside of promotions.
The largest banks (JPM, baml, wells, Citi, etc) have commercial banking groups cover clients somewhere from 100mm-2bn more or less while middle market type banks like SunTrust would consider a corporate banking client to be in the 500mm+ revenue range whereas that will be a middle market commercial banking client for JPMorgan.
At the end of the day it doesn't matter if the clients you cover in your corporate bank are covered by commercial banking at a BB because guess what you make much more money than your counterparts in that bank do.
The pay aspect really varies based on bank. Of the BBs Wells Fargo and BAML are cheap and don't pay as much as JPM and other NYC based banks based on what I know from my friends who work there. WF analysts get paid 65k or so to start and don't get the 10k pay bumps and baml guys start at 60k but get a 10k pay bump. Bonuses are 15-25% of base.
Citi/JPM/etc have same salary for corporate banking as they do for IBD, so 80/85/90 though bonuses are lower. Overall associates at some of these places do not make north of 200k but a few of the best paid shops they will.
Like i said, if you are a middle market bank, you won't be banking companies like Amazon, home depot, Johnson & johnson so for you the large corporate space would be lower revenue size as your clients are smaller. That hardly matters given middle marke guys who bank the "corporate" clients you have make far less.
Also hours at the shops I mentioned will be 50-60h a week in slow times and can easily hit 70h when you are busy.
As for roles - lot of BBs are split between coverag and credit. Both sides have their own analysts. Coverage brings in the business and has dialogue with the companies and their analysts and associates work on pitch books, marketing materials, etc. Credit will underwrite deals and monitor the portfolio and analyts/associates spend their time doing financial analysis and writing approval memorandums. Coverage has a higher bonus potential than credit and credit bonuses are definitely capped as you aren't driving revenues.
^ this is probably the most accurate information i have seen on this site as it pertains to understanding the descriptions for what Banks call corporate/commercial banking.
I'd expand on this further to say your regionals and larger community Banks will typically call commercial clients any company that has revenue ranging from $5-$100MM or with credit needs of $2.5MM and up.
But really - large Banks call their middle market lending their "regional commercial banking offices" and they deals with $25MM-$1B in revenue companies. Their corporate Banking division deals with $500M all the way up.
From what I have seen, you are going to get paid less at the Big Banks as opposed to being a top producer at a regional/community Bank - whether you are in pure commercial lending or corporate Banking. And I am mainly speaking in terms of a VP / Relationship Manager. Not really sure what top SVP / Market or Regional Managers are making at the Big Banks - nor what the credit side is making. Quite frankly, credit side doesnt get paid as such cause they are not the ones bringing in relationships/deals. Anybody can sit there and analyze deals and underwrite credit - the sales side is harder and thus is compensated better. But I do know we see a lot of people get tired of the beauracrcy at Big Banks and come to senior roles at smaller banks - often with a pay raise.
I think at Big Banks you have straight teams doing a lot of work - and as they say, many hands lighten the loads. Even on the marketing / sales side, the Big Banks have associates/admins and analysts to help you keep doing what your doing.
At smaller Banks, you are it. You are sourcing, negotiating, analyzing, underwriting, closing and monitoring - oh and dealing with deposit accounts as well (Treasury Management). Literally doing everything. I mean, you should see some of the things that I end up getting involved with. Ive spent hours literally dealing with loan documents. Why should I be doing that? I am not a lawyer. But who else is going to do it?
I literally am the go to person for everything. And while that sucks at certain levels, I believe that is why I get paid as much as I do. I am not easily replaceable whereas the Big Banks can turn em and burn em (up to a certain extent).
I also agree it doesnt matter what the hell are you doing or where the hell you are doing it at. WSO makes it seem like if you arent doing M & A at GS then you failed. If you enjoy what you do and who you work with, and are getting paid 4x-5x the national income average, then i dont care if you are a corporate banker or a teller. I personally love my bank, get paid very well, and the max amount of hours i put in are 50-55. During my slow time, i work 35 hours. And I dont live in some astronomically high COL city. No rush hour traffic. I am pretty happy with my gig.
That doesnt mean that i wouldnt mind working on larger deals, or being at a bigger bank. I can appreciate and admire what those guys do. And i get it - in the mind of Wall Street - i am a teller. And while that is misguided, ive learned to accept it. Cause quite frankly, my hourly pay is probably comparable to theirs.
Good post @B2Banker.
Good points, @"B2Banker" and @"gregt14" in regards to coporate/commercial banking. As for the OP, @"DavidLee87" it seems to me that you should try to switch to IB if you dislike your job and are very interested in lev fin at a MM bank (which seems to be where you could be headed). However, if that is not the case, I would advise you to stay where you are. Your salary is good, and if you want to do something more interesting/challenging/lucrative, try starting your own business. You have plenty of free time and the ability to fund some sort of venture. I understand your concern about exit ops, but it doesn't seem to me that you can't progress at your current job or keep building your network.
So where does Credit Suisse Corporate Lending sit? It says IBD, but all they do is arrange and syndicate leveraged loans?
Great description. SB'd
^
Skipped most arguments in this thread -
I was in the same position, except working at a BB in a top role etc.. I won't give you my whole life story, but listening to the idiots talking to you about work/life balance is BS. You think you can make more? Go and make more money. If you are not pushed what's the point of living. Fuck your work life balance people. I have left a job where I had the sweetest work life balance because I wasn't full-filled, and I am willing to risk losing it all and putting in sleepless weeks to make it more interesting.
And now a little interlude for you all:
You see this watch? You see this watch? That watch cost more than your car. i made 900'000 last year, how much you make? you see pall that's who I am, and you are nothing. Nice guy i don't give a shit. good father? Fuck you and go home and play with your kids. Wanna work here? CLOSE. You think this is abuse you cock sucker? You don't like it leave!
On this note - some people are content with just the average, some others want more. Figure out who you want to be. Some of my friends even like being cock suckers and they love it.
drunk
Making 200k per year at 27 is not average. Striving for more is not bad, "risking it all", unless you have a very specific plan, is ill-advised.
i diden't understand what is your daily routine, can you descripe it??
45h a week while making $200k? Unless you're an executive at the U.N or at one of its branches, I call bullshit.
...I'm still surprised by the sheer amount of people here, who are "okay" not striving for more. I do enjoy the work but don't we all think about our careers long term? Also, I think people, those at the associate level, at credit funds, whatever structure they may be, CLO, BDC, Hedge Fund, SBIC, PE Credit, etc. do VERY similar work and get paid a lot more. Perhaps not as much in the short term (25-50%), but upside is much much larger, you scale up fairly quickly and your ceiling is MUCH higher, vs what 750K if you make it to MD and you're 50 years old?
I call bullshit too. Some MM IB associates don't even break 200k.There is 0% chance this guy is making this much money 5 years out of school... at a regional shop like Cap One working with senior secured credit.
No. He can make that kind of money. 'Just not by working 45 hours a week. Lol. This douche is an UG trolling everyone.
No.
First, I don't believe you actually pull in $200K at a mid tier corporate bank at the associate level. You are not bringing in anything. You are just a support monkey monitoring portfolios and gathering data to plug it into credit models.
I know directors at better banks bringing in deals that are barely clearing $250-$300K. The best part about corporate banking is the expense account you have access to. I'm not really sure if you get that at the associate level or not, but that perk is fantastic.
More importantly, you can always move to IB and then move back to CB. The longer you stay in CB, the tougher it is to move to IB or PE. However, it has been done. If you have the itch to try LevFin or another IB role, go for it. You have the safety net of being able to revert back.
First, I don't believe you actually pull in $200K at a mid tier corporate bank at the associate level. You are not bringing in anything. You are just a support monkey monitoring portfolios and gathering data to plug it into credit models.
I know directors at better banks bringing in deals that are barely clearing $250-$300K. The best part about corporate banking is the expense account you have access to. I'm not really sure if you get that at the associate level or not, but that perk is fantastic.
More importantly, you can always move to IB and then move back to CB. The longer you stay in CB, the tougher it is to move to IB or PE. However, it has been done. If you have the itch to try LevFin or another IB role, go for it. You have the safety net of being able to revert back.
First, I don't believe you actually pull in $200K at a mid tier corporate bank at the associate level. You are not bringing in anything. You are just a support monkey monitoring portfolios and gathering data to plug it into credit models. But, if you truly are, good for you. Not sure why everyone gets bent out of shape about it. Whether you are or are not shouldn't impact the basis of your post.
I know directors at better banks bringing in deals that are barely clearing $250-$300K. The best part about corporate banking is the expense account you have access to. I'm not really sure if you get that at the associate level or not, but that perk is fantastic.
More importantly, you can always move to IB and then move back to CB. The longer you stay in CB, the tougher it is to move to IB or PE. However, it has been done. If you have the itch to try LevFin or another IB role, go for it. You have the safety net of being able to revert back.
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