I think I’m being underpaid

WillowTree's picture
WillowTree - Certified Professional
Rank: Monkey | banana points 33

Background: Non-target US undergraduate >> approx. 2 years at Big 4 transaction advisory (non-US office but in a major financial center) >>just entered 2nd year at US-based MM bank (HW, LI, Baird, WB), also in the same city as Big 4 stint.

When I was hired at the bank I currently work for, the offered base salary was lower than the market but not by too much. My 2017 bonus was ok percentage wise, but given that other banks in my region have been performing relatively well and from what I have heard from my BB counterparts, I am assuming that overall 2017 comp was higher forBB.

Moreover, after reading about (1) how analysts at BBs/EBs/(probably) even my the same firm I work for have gotten their base pays bumped up to the 95k range (including the city I work in), and (2) bonuses (overall and in my region) as a percentage of base have been at least in line with my firm, I am more inclined to think that I am currently being significantly underpaid.

I've been given taps to interview at different firms (IBD/PE/HF), but given that I was originally planning to stay two years at my bank and the fact that despite a handful of deals ongoing, I have no closed deals under my belt yet, I am in limbo.

tldr: Given that I am being paid rather significantly under market, should I lateral despite only staying for barely over a year and having no closed deals on my resume?

Thanks in advance.

(Edited for clarification)

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Comments (10)

Nov 7, 2018

How much exactly are you getting paid? That would be helpful to know. Usually analyst pay is very standardized though (apart from the bonus), and it's kind of strange that your base is less than other analysts.

Nov 7, 2018

I think that the fact that I am working for one of the firm's non-US offices, the comp structure probably differs... probably like how London analysts get paid relatively low to US analysts even after accounting for GBP/USD conversion.

All in comp vs market is probably 2/3 ~ 3/4 assuming market and my bonus is pegged at the same percentage-of-salary.

Nov 7, 2018

"When I was hired at the bank I currently work for, the offered base salary was lower than the market but not by too much"

Then

"comp was higher for my BB counter parties (but then again, the difference was not too much)"

"(2) bonuses (overall and in my region) as a percentage of base have been at least in line with my firm"

You are making absolutely zero sense. So you started marginally lower than street "but not by much."

BB counterparts comp was higher "but not by much" (which makes sense, non NYC MM can be expected to be paid less than NYC BB...).

Bonuses at least in line with your firm (at least... as in others might get better bonuses... but not by much... btw bonuses are group / team / firm specific so you can't really generalize too hard).

How does all this "not by much" equate to "I am being significantly underpaid"

Nov 7, 2018

To clarify, I meant bonuses were in line % wise, so the actual amount between my comp and market comp differed more significantly after accounting for the fact that BBs increased comp to 95k for A1 while our office's base pay range remained the same. In result, assuming all in comp for an A1 BB @ 95k and a 50% bonus (random number for the sake of conversation), my all in comp would still be 2/3 ~ 3/4 of market comp assuming that I also receive a 50%-of-my-base-salary bonus.

Hope this clears things up.

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Nov 7, 2018

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Nov 8, 2018

You're being way too vague for anyone to help you. It's an anonymous forum and there is nothing shocking about analyst pay, just say the numbers and a rough idea of what region (Latin America, HK/China, Western Europe, Canada, etc.)

You aren't in a U.S. city and you aren't London either which are the two highest paying markets. Any of the markets I just mentioned above are likely to be lower than U.S. and even London counterparts so that part is not surprising at all. The economics just aren't the same at these small satellite offices attached to a U.S. MM. The U.S. bankers are doing a ton of deals and the international counterparts are really just doing regional coverage or facilitating cross-border M&A. The fact that you are at one of the places that cranks out deals and haven't done one in over a year backs that up.

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Nov 8, 2018

Thanks for your comment. Trying to be as ambiguous as possible because the overseas operations of US-MM banks are quite limited.

We source and run deals out of our office (as do the rest of our non-US locations), but my lack of closed deal experience is highly attributed to the fact that a high share of our engagements are cross-border buy-sides (though you are right when you say that the US and London offices close significantly more deals. However, the economics do differ in the sense that the US/London office's of our and similar firms tend to employ a significantly larger number of employees the regional offices; i.e. large bonuses at regional offices are possible because the pool is split between only 10-30 people vs. hundreds, so bonus variability is, from what I assume, higher at regional offices).

Essentially, I am asking whether it is worth exploring outside opps because I am getting paid less than my industry peers, or should I stay at my current firm for the intended two-year period.

Thanks.

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Nov 8, 2018

I think the consensus on not only this forum but also from almost every experienced industry professional would be, at the junior level, to prioritize experience / relevant deals > pay. Let's be real now, relative to NYC / London might you be making less? Yeah, sure, possibly. But I don't think there is a single MM / BB / EB Ibanker being paid so little that their wages aren't at the very least livable.

Yeah, you might have to put off that submariner for a few years or be a bit more fiscally conservative, but IB generally is a stepping stone for most people. Fielding other job offers will come down to how much you enjoy your current role / how well you think it will set you up for the future. Moving forward nobody will say "seems like you got paid $25k less / year than candidate X, so you're not cut out for KKR"

Nov 8, 2018
WillowTree:

Thanks for your comment. Trying to be as ambiguous as possible because the overseas operations of US-MM banks are quite limited.

We source and run deals out of our office (as do the rest of our non-US locations), but my lack of closed deal experience is highly attributed to the fact that a high share of our engagements are cross-border buy-sides (though you are right when you say that the US and London offices close significantly more deals. However, the economics do differ in the sense that the US/London office's of our and similar firms tend to employ a significantly larger number of employees the regional offices; i.e. large bonuses at regional offices are possible because the pool is split between only 10-30 people vs. hundreds, so bonus variability is, from what I assume, higher at regional offices).

Essentially, I am asking whether it is worth exploring outside opps because I am getting paid less than my industry peers, or should I stay at my current firm for the intended two-year period.

Thanks.

Are you considering your industry peers your U.S. colleagues or similar banks in your city? If it is the former then you are likely not underpaid, that's just how your local market is. If you're saying that other MM bankers in your city are getting paid significantly more than maybe you should consider a move.

Also, all things equal I don't think regional international satellite offices are great places to get a complete analyst experience. The bread and butter of every single one of those banks you listed is MM sell-sides (I would guess it's 80%+ of fees) - cross-border buysides are one of the least likely deal types to result in fees/deal experience. You want to be at a place that is strong in originating and is a focal point of the platform. If you're in Switzerland that is something more like UBS/CS, Germany DB, Canada RBC/BMO, etc. At my EB the international satellite offices (exc. London) are really just there to facilitate deal making from the U.S./U.K., their analysts are not getting anywhere near the experience that the NYC office is.

Nov 8, 2018