How to Answer Salary Question in Email?

Hey guys, I had a quick question for you. I received an email from a managing partner of a boutique asking me what my expected compensation would be as an analyst (I received this after interviewing with another partner). The firm is based in Chicago and was recently started. I would imagine - in this economy - that compensation for employees is a concern of theirs, at least for the time being. I was wondering how I should approach/respond to the email. I really do not want to give an exact figure in the email but I also want to stress cost of living, market rate, etc. I really would appreciate any feedback. I have to email him back today. Thanks!

Salary Expectations in Email

When offering salary expectations, there are two schools of thought that our users have explained:

  • Offering a well researched range
  • Requesting the "market rate"

Market Rate Expectations

Some users caution that offering an exact number can lead to you "shooting yourself in the foot" and low balling yourself. Our users advise requesting the "market rate."

User @Human", a private equity partner, offered this perspective:

Human - Private Equity Partner:
Always say: Market Rate. Never put a dollar amount until the employer offers a number, then you can decide what to do with it (negotiate upward, accept or reject the offer). Never get low balled into a lower number. Most reputable firms will pay at a decent rate.

User @TheMasao", a private equity vice president, emphasized that market rate is preferred to "negotiable":

TheMasao - Private Equity Vice President:
Exactly, if you don't know what the going rate is don't shoot yourself in the foot. Negotiable sounds like you want to negotiate before you've accomplished anything.

Research Rate Expectations

While some users caution against giving a specific numbers, some users believe that it is important to give a real number when asked for your expectations. You should research similar firms and experience levels to see what salary you should request.

CaptK - Private Equity Partner:
You want to phrase it that "I am excited to come work for you, and in all my experience and research, $xx,xxx seems to be market compensation for analysts at firms like ours."

BankonBanking:
Simply give a modest range - for example, BB first years earn $70k starting, so it would be fine to suggest $60 to $70k and then support that with something like based on your research, starting salaries for 1st year analysts are between $60 and $70 or even $55 to $70 if you want to be even more conservative.
(posted in Sept 2010).

User @IlliniProgrammer", a hedge fund quant, commented that avoiding a real number is a mistake:

IlliniProgrammer - Hedge Fund Quant:
No, no, he's requesting an ask from you. You've got to be a man and give him a number. I would cite the market rate for my services.

User @IlliniProgrammer" went on to offer guidance for negotiating your rate with smaller firms:

IlliniProgrammer - Hedge Fund Quant:
If he's equity rich and cash poor - and he has a good track record, you may want to think about offering to take a lower cash base and/or bonus and take some of the pay in the form of options or equity. Enumerate things in writing, make sure he some kind of corporate or partnership structure set up, and expect to make junior partner next year in lieu of a bonus.

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Comments (52)

Sep 9, 2010 - 6:08pm

You want to phrase it that "I am excited to come work for you, and in all my experience and research, $xx,xxx seems to be market compensation for analysts at firms like ours".

You don't want to sound like "I demand $xx,xxx or you can go fuck yourself"...

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
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Sep 9, 2010 - 9:00pm

No, no, he's requesting an ask from you. You've got to be a man and give him a number. I would cite the market rate for my services.

If he's equity rich and cash poor- and he has a good track record, you may want to think about offering to take a lower cash base and/or bonus and take some of the pay in the form of options or equity. However, don't do him a favor and expect him to repay it. Enumerate things in writing, make sure he some kind of corporate or partnership structure set up, and expect to make junior partner next year in lieu of a bonus.

Sep 9, 2010 - 9:20pm

I would agree with most of the previous posters. Simply give a modest range - for example, BB first years earn $70k starting, so it would be fine to suggest $60 to $70k and then support that with something like based on your research, starting salaries for 1st year analysts are between $60 and $70 or even $55 to $70 if you want to be even more conservative.

Sep 10, 2010 - 1:13pm

Salary Expectations for Boutique Bank (Originally Posted: 07/08/2009)

I am looking to take an associate role in equity research at a boutique bank in the mid-Atlantic region (Baltimore). I am straight out of undergrad at a non-target school. What do you think would be a reasonable expectation for both salary and bonus? Thanks in advance.

Smokey, this is not 'Nam, this is bowling. There are rules.
Sep 10, 2010 - 1:22pm

Help with salary expectations. (Originally Posted: 05/25/2010)

I'm just curious as to what salary and total comp should be for a trader that would eventually (as soon as possible) be the senior trader at pretty successful mid market distressed debt fund now and maybe 2-5 years down the road. The person is two years out of college, and an analyst at a BB. Also, is a sign on bonus normal? Appreciate it.

Sep 10, 2010 - 1:27pm

Giving Salary Expectation? (Originally Posted: 03/24/2012)

Should I give a salary expectation on this application for a summer analyst at an MM or boutique? It seems its optional. I don't want to come off as uncertain and I'm not sure what salary I should enter. I'm also not sure what sort of salary is appropriate since this is also in Canada.

Sep 10, 2010 - 1:44pm

How do I answer the dreaded "Salary Expectations" question? (Originally Posted: 02/07/2014)

I've been sent a preliminary form to fill out for an upcoming interview/analyst test for a smaller IB. Of course there is the "What are your salary expectations for this position?" question on there.

What is the best way to answer this? I have no prior IB experience, but am an older, career switcher with a few years of other financial experience (PWM, Small business consulting/valuation). I don't even really know what a the average range is for analyst salaries, specifically at a smaller firm.

Any thoughts or suggestions?

Thanks!

Best Response
Sep 10, 2010 - 1:48pm

Salary Expectations (Originally Posted: 11/11/2014)

Hi all, been a while since I've been on WSO :). I'm hoping to get some guidance re: salary expectations.

I'm interviewing with a financial technology company, Series A stage, around 100 employees, they're doing well. The role is in financial markets/business development in Manhattan.

I graduated from undergrad in 2010 and worked as an entry-level analyst in investment banking on Wall Street for two years. I completed the Chartered Financial Analyst (CFA) and Financial Risk Manager (FRM) programs during that time.

During the last two years, I've started several (ultimately unsuccessful) startups in Silicon Valley. The first was unrelated to fintech, but the current one is closely related to the job I'm interviewing for and it's fair to say I have deep knowledge in the field. I'm also a software engineer (I won't be doing a ton of that in this job, but the ability to understand and explain the company's tech is important).

What's a realistic salary expectation? For reference, my last year salary on Wall Street was $80k plus bonus. Is that a reasonable starting point? Can I ask for $150-$160k or is that too optimistic?

Thanks!

Sep 10, 2010 - 1:49pm

I think it has a lot to do with their overall budget being a smaller group. Overall, it sounds like you are more than qualified and should be a top candidate. But as far as salary, my gut says that's a bit high, but not too much. I'm thinking more like $115-130 range.

Sep 10, 2010 - 1:50pm

I think it has a lot to do with their overall budget being a smaller group. Overall, it sounds like you are more than qualified and should be a top candidate. But as far as salary, my gut says that's a bit high, but not too much. I'm thinking more like $115-130 range.

Sep 10, 2010 - 1:51pm

Help - Salary Expectation at Deloittle- gave too low an answer (Originally Posted: 10/16/2014)

Hello everyone. I am about to get into the third round of Deloitte interviews for S&O. HR said it would be a senior consultant role since I have two master degrees and 8 years industry experience. I have been at my firm for my whole career and they are known to low ball salary. When I was asked first round about my expectation I have an answer 13 percent above my current extremely depressed salary. I was worried that the large gap between market and my current salary would be an issue. My concern is that it appears my ask is about 50k below market for the job.

Did I hose myself on this or does Deloitte hr as a practice offer market? I am worried since this is a large chunk of cash.

Sep 10, 2010 - 1:52pm

I cant comment on Deloitte specifically, but I know for other Big 4, for experienced hires, they can negotiate more after an offer or right before they get it. obviously you will need reasoning, but if the market rate for someone that level and with your experience is going for 50K more than that they offered, I wouldn't imagine it being that big of an issue to close that gap.

Hugo

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