How do they decide who is STAR ANALYST (or TOP BUCKET)?

robot9956's picture
Rank: Monkey | banana points 45

So I hear a lot about the different bonus "buckets" and how top analysts get much better bonuses than others. How do they objectively score you? By deals/pitch ratio? Average # of mistakes made on pitch books?

Also, how do headhunters know who is top analysts or not? If a PE shop wants a top analyst from goldman, how do they approach them? How do they know that they want Kevin Johnson vs. Johnny Cresland if they are both in the same group? Do MDs tell headhunters who the best analysts are?

Comments (34)

Oct 26, 2009

The MDs and VPs give you reviews. And this is what decides your price.

And also, the way PE shops find top analyst is from your recs. My friend left Merrill with his MD because of his great recs.

Oct 26, 2009

It's just based on reviews and general perceptions. It is usually pretty clear who are the stars and who are the really bad ones (not just at analyst level). It's the bunch in between the extremes that is where it is not always fully objective and depends on stuff like politics and who backs you. This is sort of recognised by the system since the middle brackets have a large percent of ppl and the bonus ratchets aren't usually as wide (this may not be for all banks)

Oct 26, 2009

It's all subjective and depends on how you get along with other senior people on your floor. If your MD goes to bat for you and other MDs like you as well then you have a good chance of hitting the top bucket.

The only objective measure that they can use are your scores from training if you are a first year analyst, and those scores may or may not play a small part in the decision making process.

Oct 26, 2009

you get a SCORE during your TRAINING? what?!

Oct 26, 2009

Yes you get scores during training. They keep track of how well you do on th accounting assessments, modeling projects etc. They also keep your ratings on your final case studies and whatnot. They get reports on who pays attention and who is passed out in the room or playing stupid games.

That being said, the data is really only used if you give them an excuse. Top analysts don't need to worry, marginal analysts may get lower bonuses because of it. However, bottom analysts that did well during training are less likely to get the boot then those who goof off. Last year we let go of a number of analysts who didn't take training seriously.

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Oct 26, 2009

Politics play a huge role.

Oct 26, 2009

Typically the true "stars" are very obvious and so are the really bad analysts. Decisions primarily focus on your reviews and don't listen to PowerMonkey as training scores have absolutely nothing to do with it, they are literally completely forgotten the day training is over unless they have to fire people in the first 2-3 months. I was in bottom half on training scores and still got top bucket.

The real tough decisions are for the 2-3 middle buckets, as involves alot of politics and other minor stuff. Additionally, this is the area where it is often hard to tell the difference as you often have two people who both do pretty good work, with very minor things differentiating you.

Since it typically takes 4-6 months for you to really know where you stand, having senior support and good standing with your reviewers becomes extremely important if you fall in one of the middle buckets.

As for headhunters, they will talk to people in your group and know exactly what bucket you were in. Additionally, the headhunters will often reach out to references to get specifics. So if Blackstone says they only want to interview top bucket Goldman TMT and Morgan Stanley M&A kids from Ivy Schools, the headhunter will only send your resume if you meet the criteria.

Dec 2, 2009

Ditto on politics.

But it if also very heavily based on reviews and your staffing capacity.

If you're taking on more work than everyone else, offering a contribution beyond what everyone else is, are being entrusted with more responsibility than your peers, etc... you're a star analyst.

if you're not sure if you would qualify as a top analysts or not, then you're not one.

Dec 2, 2009

how are these buckets decided among offices? For example, a city like Atlanta with 1 or 2 analysts compared to a city like Charlotte with 40 analysts. Would the 2 Atl guys basically be fighting eachother for the 1 spot in the top bucket and the other automatically gets the next bucket?

What if your office has like 5 analysts? Wouldn't that create a lot of tension between analysts? That is not condusive to a good work environment..

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Dec 2, 2009

Distribution in regional offices depends on how much spoils there are to go around. Offices that generate greater total revenue and revenue per banker will get more allocations of top-bucket slots. Another factor is the amount of suction the office heads have within the firm.

There is far more apathy among analysts than you assume. Like others have mentioned, the stars are obvious. No one from the middle is really willing to go the extra mile and crush the last bit of their soul in hopes of getting $10k more at the end of the year. The real tension arises when work is distributed in an inequitable fashion, or someone is perceived as not pulling their weight.

Dec 2, 2009

depends on your connections and who you're fucking (incidentally that is another type of connection)

I'm making it up as I go along.

Dec 2, 2009

What about if you bring in a deal somehow? Does that put you right at the top? Can you get an even larger bonus that what is normal?

Dec 2, 2009

I think the number I heard on the first day of training was 10%. It sounds right, but I don't really remember.

Dec 2, 2009

10% sounds right. If you're in a top group (M&A at most places) at bank, they might adjust to top 20% since most analysts in the group are at the top anyways.

Dec 2, 2009

top 15% at mine... pretty tough to get top if you think about it. it was 15% of entire analyst class, meaning that the top groups did get a much higher proportion of top rankings. but difference between top and 2nd top (~35%) was only 5k anyways.

Dec 2, 2009

but that's not issue an issue at all. After taxes, it's only 3500 difference. Most top PE shops will only interview people who were top bucket. That's where the difference comes -> Interviews and exit opps.

Dec 2, 2009

a lot of PE interviewing is done before bonus buckets etc. even get announced (depending on the firm)

Dec 2, 2009

How do they know you're top (the pe firms that is)? Do they just ask?

Dec 2, 2009

But they would know your 1st year bonus, right?

Dec 2, 2009

can someone also explain the tiers? I didn't know there were tiers, thought all analysts were just analysts. Is it based on purerly performance?

Dec 2, 2009

They are based on your reviews. For analysts, final reviews generally occur in May/June timeframe (differs from bank to bank, but majority of BBs follow this timeline). Senior management, from what I've heard, tend to look at both your 'numerical' score and your comments. I would say that more emphasis is put on the quality of the comments given than the number. I say this because at least in my bank, you are supposed to pick 10-15 reviewers of all levels . Obviously, you want to pick reviewers who will speak highly of you, so everyone will get high marks across the board. The delineation is found in the actual comments. People you have worked with in depth will give you very specific comments (hopefully very good ones) instead of the generic "take ownership of work" or "diligent worker" comment.

From there, it's kind of weird how they decide how they tier out analysts. It is dependent on a number of things which focus on your group (M&A? Lev Fin? DCM? Industry?), MD power/pull, quality of reviewers (i.e. if you have only associates and analysts reviewing you, they are not given as much weight as MDs and SVPs), group head pull, etc. It's pretty political in that respect. There are definitely groups who have some great analysts but don't get their recognition (i.e. top bucket) because their MD does not have much clout at the "bargaining" table.

In the end, they have a 'ranking' of analysts from 1 to however many there are in each year. We had about 4 or 5 tiers of 1st year analysts with the bottom tiers either being laid off in May or not given 3rd year offers. I even heard of a kid getting laid off during his final review (his sit down), but I think he was an anomaly.

In the end, this is as much info/speculation I have gotten about the process. Info comes from my MD and VP who've been at my firm for awhile.

Dec 2, 2009

HerSerendipity is right in that performance weighs heavily into it, but it is also highly dependent on your group, how much "clout" they have and how well the economy/firm etc. are doing.

Quick example - last year my group did very well, the markets were doing great and everyone was making tons of money. So more people than usual got top tier bonuses and even if you didn't do that well, hey, you'd still probably earn a decent amount of money.

This year, by contrast, hardly anyone got top tier because of the poor market over the past year and the relative lack of business compared to last year. It also doesn't help if your group goes significantly downhill.

My recommendation: do the best you possibly can and don't worry too much about which tier you fall into - it's simply out of your control and depends more on politics and such in many cases.

Besides, after you move onto other opportunities (whether buy-side or something else) no one really cares what tier you fell into. :)

Dec 2, 2009

What do the bottom-tier guys do versus the top-tier guys? Are the bottom-tier people just "bad"? If so, what makes them bad?

Dec 2, 2009

If it's THAT political, I'd have to respectfully disagree with dosk's suggested 'don't worry about it' stance - if I'd done a great job and therefore expected a bonus on par with said performance, I'd totally be inclined to kiss some ass and ingratiate myself to superiors if I knew that politics would have as significant an effect on my bonus as the quality of my work...obviously I wouldn't feel great about it, but hey, my bank balance would look a damn sight healthier

Oct 26, 2009

The thing is you don't know how good you are versus analysts who aren't in your group. Nor do those that review you in general, since even if they are working across groups its often with different skillsets (ie they might have worked with an ecm analyst and you as an industry analyst for example). Sure you can be pissed off if you think you did worse off vs those in your own group but usually that wont happen since amongst people you work with it's relatively easy to get a sense of how good people are.
Where the politics people above mention comes in is the overall rankings. There is no way that it can be objective since there is nothing standardised like tests nor a direct p&l as for Ds and MDs. It's here that politics and all those other factors come into play. I know one guy got top tier who I don't think from personal interactions was too bright but then again at around bonus time he was the only analyst left in his team for multiple reasons and as a result he was in a pretty strong position. At the end of the day the difference post tax between tiers is not massive in terms of those immediately above and below you so unless you're down the bottom when you felt you should have been at the top it isn't really that much to fuss about it, particularly these days when the the bottom tiers are fired you'll be glad that your year's work actually resulted in a paycheck.

Dec 2, 2009

Bottom tier people just tend to be lazier, have a bad attitude and try to get out from doing work. Surprisingly, it happens a lot. Everyone comes in wide-eyed and eager, but i'd say after 3 or 4 months, a level of disgruntlement definitely sets in and some analysts lose their drive.

Sometimes your superiors have no real pull so that won't really help. It's sort of two fold: if you are in a group that pulls in a lot of business and you are a great analyst, you are usually rewarded (this past year, i've definitely seen anomalies happen both ways). But if you are in a mediocre group that ebbs and flows with the market, no amount of kissing up to your superior will help especially if he/she is not willing to go out on the limb for you or if he/she just doesn't have much clout with members of compensation committee.

Oct 26, 2009

The above is probably a pretty good description of bottom tier. I think it's made up of two types of people. There are some who intellectually aren't up to the job but made it in / survived anyhow but they eventually get spotted and booted particularly as the market falls. The second type are as capable as your average analyst but don't really give a shit anymore, however for one reason or another don't decide to leave of their own accord. I've seen both types in equal measure. It's much easier to see the bottom tier than the top tier, which anyhow is far more subjective in most cases.

Dec 2, 2009

Upper management, also known as C-level executives, doesn't have time to worry about those things.

http://www.drmarkklein.blogspot.com/

  • rottenapple
  •  Dec 2, 2009

weird.. I expected Dr. Klein to say something witty, insulting, yet on the point.

Dec 2, 2009

OConnor, pls explain "intellectually not up to the job." I've probably harped on this a few times already, but i can't think of anything in banking that requires serious outsize intelligence.

Dec 2, 2009
Dec 2, 2009