How Did Covid Affect Your Bonus?

Analyst 1 in IB - Ind

Wanted to start a thread to see how everyone else's firm is reacting to Covid and how it has affected your bonus, Has your bonus been unaffected relative to previous years, or have you seen a significant decrease? My MM firm is down about $10-$15k at AN level yet hours have been just as bad, if not worse.

Comments (81)

  • Associate 1 in PE - LBOs
Jul 21, 2020

Curious to hear what others have said. Friends at my previous bank are echoing the same sentiment of being ~$15K down from last year's comparable bonuses at each bucket. Heavy Lev Fin shop so may differ from M&A boutiques.

Jul 22, 2020

Big 4 consulting bonus completely off the table after 2 weeks of the pandemic. Also any agile promotions withheld. End of FY promotions possibly getting delayed as well ;)

  • Analyst 1 in IB - Ind
Jul 22, 2020

wow that is rough - whats morale like there?

Jul 22, 2020

Lets just say I did the calculations if we don't return to on-site client travel and, tax-free, all travel perks included, I am losing $39k+ -$42k+ (assuming some travel with personal vehicle reimbursement).

Not including the expected bonus, so probably $50-$55k total I lost this year.

Morale is shit, lots of people on the Advisory side within my age bracket (early to mid 20s) that I talk to are starting to look towards side hustles or are flight risks.

    • 2
Jul 27, 2020

Can confirm, all Big 4 offices in my region declared that no bonuses would be paid for FY20 only 2-3 weeks into confinement. They also laid off about 5% of the Financial Advisory staff within the first month. There were subsequent, smaller waves of layoffs. Promotions are also delayed at most big 4s, and year-end pay increases are off the table.

Funny story: 3 weeks into COVID, firm asked all employees to volunteer for a 20% pay reduction in order to help the firm and prevent any COVID-related layoffs. The participation rate in this program was much higher than anticipated, and the Firm's management seemed glad. A week later, they announced they would be laying off 5 to 10% of advisory staff anyway.

Morale is down the gutter. Most of my friends in Big 4 advisory are currently seeking to exit.

Jul 27, 2020

big 4 firms are the worst. I hope they all go bankrupt.

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  • Analyst 1 in IB - Ind
Jul 22, 2020

Providing yet another data point here. Down $15k across the board across all buckets compared to last year.

  • Analyst 1 in IB - Ind
Jul 22, 2020

what type of firm - BB / EB / MM?

Jul 22, 2020

Not IB, Distressed PE/PD here, bonuses are off the table completely.

But vertical movement is definitely possible since lots of mid-level people are leaving. So somewhat okay if the junior guys are promoted since our bonuses probably equal the pay raise to AVP/VP level

Jul 22, 2020

Interesting that PE bonuses would be affected. Bonuses are paid out of management fees, which won't have changed... Unless there is risk you don't raise another fund I guess.

Jul 23, 2020

Yes, our latest fundraise got cancelled. Plus we're a small fund (<200MM) and we have a couple covenants that prevents bonuses to be given out to anyone below the Partner if we broke certain prerequisite.

  • Associate 2 in Consulting
Jul 22, 2020

Consulting bonuses are a joke as is, but COVID-19 slowed business so they will be affected too. In previous years my firm paid out 10-15% of base and I don't see this year going beyond 5-10%.

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  • Associate 2 in IB - Gen
Jul 22, 2020

Not if it's restructuring related, which have massive bonuses that rival IB

  • Associate 2 in Consulting
Jul 23, 2020

Not RX, I mean typical Strategy

Jul 22, 2020

Antares Capital had a 40 person layoff of all front office deal teams so I am assuming their bonuses are off the table.

    • 2
  • Analyst 1 in IB - Ind
Jul 22, 2020

that's bad

Jul 22, 2020

There are some articles online discussing it and they quote a 10% workforce reduction. In reality, I have heard from friends that there were ~165 front office heads so it was a huge layoff. Think it happened last Wednesday. Who knows if you start seeing other large layoffs in the financial services industry come January 2021.

  • Analyst 1 in IB - Gen
Jul 22, 2020

European bank in Europe. Higher ups basically said that there will be little to no bonus at all for this year, and that we should look forward to, and renew the pipeline for, 2021/22.

Gonna be some personnel cuts across the whole bank, but IBD sounds like it's gonna be spared, and that we might poach some disgruntled talent from competitors.

In summary; job is feeling pretty safe, but not expecting any bonus.

Jul 22, 2020

Not BB right?

Jul 22, 2020

Sounds like HSBC

Array

  • Prospect in IB-M&A
Jul 22, 2020

What do you think the landscape will look for those in s&t?

Jul 25, 2020

What a stupid question. If you think S&T is dying, I ask you to meet with senior people in the industry.

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    • 1
  • Analyst 1 in IB - Ind
Jul 22, 2020

Work at more of a capital markets focused shop and bonuses were actually flat for analysts. Spoke with an analyst the year above me who got the same rating I did and confirmed that it was the same as last year

  • Analyst 2 in IB-M&A
Jul 22, 2020

Any info on EBs with a strong RX presence? Like EVR/MOE/HL/Laz?

  • Associate 1 in IB - Gen
Jul 22, 2020

Not sure about when the timing is for everyone but one of those shops only announces after their earnings release. Only EVR (today) has released earnings so I expect no numbers until 2 weeks from now

Most Helpful
  • Senior VP in HF - Other
Jul 22, 2020

I realize it sucks working the same if not more hours and having a bonus get eliminated or reduced. Really though its just the nature of the beast. If you're going to be in finance for the long haul, you'll realize there are going to be good and bad years. Nothing is a given, most certainly bonuses. Easier said than done of course, but should all be thankful that the fed saved the market and thus finance jobs/bonuses. Could be a lot worse at the moment. Does this change anything in regards to being bummed out, no it blows no matter what, just providing some perspective as someone that has been through a couple cycles now.

Side note - in regards to why a PE bonus would be down despite AUM flat - its a function of both 1) they can pay lower because market has now legged down - bonuses are much more market driven than a reward for hard work/distribution of the honey pot, and 2) saving more for a rainy day just in case the fund needs the cash at some point.

  • edit- I fully expect my bonus to be down this year - any where from 10-50%. Ideally its not but I'm managing my expectations.
    • 5
Jul 27, 2020
Senior VP :

Side note - in regards to why a PE bonus would be down despite AUM flat - its a function of both 1) they can pay lower because market has now legged down - bonuses are much more market driven than a reward for hard work/distribution of the honey pot, and 2) saving more for a rainy day just in case the fund needs the cash at some point.

Private Equity funds charge fees when they close transactions and a portion of the fees typically get allocated to the management company, which is the entity that pays out bonuses. In addition, portfolio company monitoring fees can contribute to the management company fee income. These supplemental fees are affected when the PE firm is not actively doing deals. Lenders typically "turn off" the monitoring fees when a portfolio company is in covenant default, decreasing the cash stream for the management company. Depending on the PE firm's structure, it may be heavily reliant on these two fee streams in order to pay full bonuses each year, which is why you can see bonuses cut during a downturn.

While yes it is possible that the PE firm is saving money for a rainy day, this is unlikely. The management company needs to pay tax on its income, so often times any excess profit is just dividend out to the partnership at the end of each year (many PE firms will have a profit share plan that accomplishes this). Note that the "fund" and the "management company" are two separate entities and you cannot just pass cash around between them.

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  • Senior VP in HF - Other
Jul 27, 2020

Yes, great points. Ultimately large funds with more than enough revenues/profits to go around purely based on mgmt fees might choose to pay lower bonuses to more jr people simply bc the market bears it. However, these are two great call outs on revenue streams that disappear even on flat aum. Its kinda a joke these these fees are even allowed by LPs as its the entire point of a mgmt fee but that's an entire separate matter.

Funniest
Jul 22, 2020

Deutsche Bank is actually making people pay-in to stay employed during bonus season.

    • 27
Jul 22, 2020

MM here. Down about 10-15 percent compared to last year (which was also a shitty year). Morale is pretty low as we are working more hours as well.

  • Analyst 3+ in IB - Gen
Jul 22, 2020

Down 10-15% compared to last year meaning the bonus you yourself got last year or what someone else would've gotten last year?

I.e. is an AN2 earning 10-15% less than AN2 last year, or earning 10-15% less than AN1 last year?

Jul 22, 2020

AN2 earning 10-15 less than AN2 last year.

Jul 22, 2020

How much higher is AN2 bonus vs. AN1? typically

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  • Analyst 3+ in IB - Gen
Jul 22, 2020

All in normalized environments (no COVID) for top bucket. Might be higher at an EB.

AN1: $40 - $70

AN2: $55 - $90

    • 1
Jul 22, 2020

Cantor announced delayed start dates for incoming junior class earlier this week if that's any indication of what they'll pay bonus wise to existing juniors

  • Analyst 1 in IB - Ind
Jul 22, 2020

yikes

Jul 22, 2020

    • 10
Jul 22, 2020

a hit of $15k is peanuts, I think a lot of folks will wind up lucky to keep their jobs and if they do might see 25%-50% drops from last year.

--$$--

    • 1
Jul 22, 2020

I expected my bonus to be keeping my job, but I'm fortunate my shop is having a record year and my portfolio is on pace for an identical outcome as last year which was also a record.

Still 5 months left, I completely understand I may lose it all. And am just happy to be going along. I don't stress, I expect nothing. If I get nothing, I'll hit my expectations. If I get something, then great. I'm just going to try to do my part to keep everyone's head up.

Jul 23, 2020

So signing bonuses for incoming FT are off the table I'd assume?

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  • Analyst 1 in IB - Gen
Jul 23, 2020

starting at a BB in a few weeks, got mine

  • Intern in IB - Gen
Aug 1, 2020

was signing bonus in line with previous years?

Jul 23, 2020

you'll get that it's written in the contract

Jul 23, 2020

Boutique shop here. Hours have been much worse & we've picked up a full plate of new mandates. Bonus is 100% intact

  • Analyst 1 in IB - Gen
Jul 23, 2020

BB AN 1 here (GS / MS).

Bonuses pretty much unchanged, management made a diligent effort to support analyst bonuses given were still working a ton. Obviously pleasantly surprised and we appreciated it.

Top may have dropped 7.5k but the mid to mid-top buckets same as last year give or take 2.5k

    • 2
  • Prospect in IB - Gen
Jul 24, 2020

Are GS/MS still in the $130k-$140k range?

  • Analyst 1 in IB - Gen
Jul 24, 2020

Yeah we were in the 125-150 range this year. Have to be pretty bad to be below 130 though. Most people hit that at least

    • 1
Jul 23, 2020

I received my bonus already this year. Next year maybe a toss up.

Greed is Good!

  • Analyst 1 in IB - Ind
Jul 23, 2020

London office of US BB here: bonuses went up vs last year. Not a lot but increase on the avg

Jul 24, 2020

tier I or tier I bis / tier II BB?

Jul 23, 2020

delete

Jul 24, 2020

Ask me in 2 weeks

Jul 24, 2020

Do u think a year end bonus foer a new analyst startin in Aug is out of the question? My group has told me we're super busy but who knows. Would love to hear what I should expect.

  • Associate 2 in IB-M&A
Jul 25, 2020

If your bank does stub bonuses in December you'll probably receive something, but down from previous years. Depends on firm/group

  • Analyst 1 in Other
Jul 24, 2020

Bonus is fucked, but it could be worse, I could be in Audit or something

    • 1
Jul 25, 2020

Not bad, no issues from our fund. Only back office is being cut ofcourse. Some desks had huge increases in bonus. Really varies on the desk your on.

Array

Jul 26, 2020

In-house strategy department - bonus not impacted, still getting 100% of full target Bonus.

  • Associate 2 in IB - Gen
Jul 31, 2020

whats the all in comp for in house strategy at your firm at the analyst level?

  • Associate 1 in PE - LBOs
Jul 26, 2020

Left a top group at mid-level BB a few weeks ago. Shockingly, bonuses were a lot better than expected: top bucket was $70k for AN2. The MD who gave me the number indicated that $70k was ~10-15% under last year's top bucket bonuses, so last year was $75-85k if I had to guess.

  • Associate 3 in IB - Gen
Jul 27, 2020

I know we paid our analysts 10-20k less across the board at a lower BB

  • Analyst 3+ in IB - Ind
Jul 28, 2020

Bump. How do people's numbers look like - haven't gotten mine yet?

Jul 28, 2020

MMPE, 100% of target bonus achieved
However, had terrible experience in banking (GS/JPM/MS SF). Good luck out there

Jul 30, 2020

Any updates? Nothing from JPM yet

  • Analyst 3+ in IB - Gen
Jul 30, 2020

I know at least some of Credit Suisse released today. For analysts, bonuses are only about $5-10K lower than normal

  • Associate 2 in IB - Gen
Jul 31, 2020

any word on S&T bonuses?

  • Associate 1 in PE - Other
Aug 1, 2020

BofA IB numbers in line with last years AN1 & AN2 numbers.

    • 1
Aug 1, 2020
Comment
  • Analyst 1 in IB - Gen
Aug 1, 2020
  • Analyst 1 in IB-M&A
Aug 1, 2020
  • Intern in IB-M&A
Aug 7, 2020