Kid getting paid $1mm out of college???
Saw this post on Twitter:
https://twitter.com/wallacesnoop1/status/13314255…
Does anyone know anything about this? This is absolutely absurd.
Saw this post on Twitter:
https://twitter.com/wallacesnoop1/status/13314255…
Does anyone know anything about this? This is absolutely absurd.
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If you're the absoltue best and what you do and it generates revenue, you'll get fuckin paid. Key point is it's differentiated value
Take basketball for example. There's 2nd round picks guaranteed to clear more than the dude you just pointed out. They are the top 0.00001% of the population that plays basketball and their value is entertainment which generates revenue
The difference here is that there is no proof, in fact barely any indication, that a kid out of college at a hedge fund can really be good at what they do or generate revenue. Unlike a college basketball, where you are basically doing the same thing you would do professionally
What he said^ lol. This is a kid straight out of college not going into sports which is completely different.
Heard of a kid from HYP getting a 600k signing bonus from Citadel, so I assume he was banking ~900k first year. He had offers from everywhere and had won a gold medal in the international math olympiad.
Citadel signing bonuses often have a nasty clawback if you leave (or get fired) within 12 or 24 months. It serves as a low risk way for them to make your compensation package seem a lot larger than it actually is, given their turnover rate.
I see some people leave soon after they join. I also heard that many of them indeed get the promised bonus even they left. Is it true? or do you expect the real amount will be less than the promised amount?
Was he a quant or on the traditional side? Have heard of mythical bonuses like these for quants but never for the guys coming from banking etc. That's just my network so obviously could be wrong but that's what I've seen
Quant. He had the choice between CitSec and GQS (on the hedge fund side) and chose CitSec.
If true, the amount of pressure on someone with that payday is huge. You can leverage offers, you can even be offered a ton without leveraging all that much, but firms don’t pay you $1mm without expecting you to be able to deliver quickly and deliver a lot. Much easier to fire someone who costs this much than someone you are paying to develop them over time.
Not necessarily a bad thing, but not everyone can deal with the pressure that well.
To be fair, I would guess the vast bulk of that $1m is a one time signing bonus, and that comp the few years following would probably be closer in line with other juniors, maybe slightly higher. Just a guess though what do I know
If you're winning IMO, Putnam, etc. and doing PhD-level research as an undergrad then there's bound to be a bidding war right? The raw intellectual horsepower of this one kid probably dwarfs the combined brains of all the Prospects in IB on here. Paying 1m guaranteed to lock a genius into your firm seems like a pretty solid deal when other people get paid hundreds of thousands to format PowerPoint slides for a living.
The problem is what the other poster said. Being a genius doesn’t necessarily mean being able to add that much value to a firm. Yes, someone who is proven costs a lot more, but that is quite a bet to take when you can get very high caliber people for much less.
The top quant candidates usually go for ~500k out of undergrad anyways, so this is only 2x as mentioned in the tweet. Whoever is paying up is really just betting they'd rather have this kid versus 2 slightly worse ones. I agree with your statement, that it's unclear that they will add 1m+ worth of value to the firm, but can't the same be said for IB analysts? They can get paid upwards of ~200k to do low-complexity work, but that's the going rate so firms need to match it.
Kind of hope he flames out, buys a bunch of btc and being a mainstay on WSB, and ends up way richer than anyone else being hired at Citadel this year.
I personally know a kid of won silver medial at the IMO, now he’s studying physics at my country of origin, and he stayed home for college because he couldn’t speak English. I hope he never sees this post.
Btw speaking with him made me feel a slow dumbass, kid was studying math 4h/day after class in high school
I work at a major quant firm, and we are constantly running into math problems that a very small number of people on our team can solve well (despite everyone having fairly impressive quantitative credentials), some of which were hires out of undergrad. For us, there is no question that some undergrads can have impact in the many millions of dollars. However, it would not be possible for them to do so without the platform they are operating on and they have limited opportunity cost (tech & academia don't pay as much) so compensation often ends up being fractions of their impact (even though the supply of this kind of talent is very limited). I know we have hired top of market quant undergrads (IMO gold medalists, good ML publications, etc.) for well under $1mm, but also feel we compensate them fairly by paying well above their next best alternative & providing a highly academic work culture.
So is paying $1mm instead of $500k to someone whose EV of impact is $10mm really that crazy? Only if we live in a world where it is crazy for companies to pay their employees a dime more than their next best opportunity.
If someone is really good at quant interviews, they can rack up many offers at once and play them off against each other. The difference between $200k and $1m is basically pennies for a big firm, especially as a one-time payout to get someone to join. They are paying for a small chance that this person will make a big impact, and accept the (much higher) chance that they don't do much, in which case they can be paid the same as anyone else after the first year or two.
Yes exactly, downwards comp revisions are less uncommon than one would think.
The thing someone above mentioned about an academic culture it's a weird draw for these people. I have a friend who was offered ~$700k to leave his position at a university and refused to do so because he hated the idea of working for "business". I don't think any amount of money will make some of them move which is why these offers have to be somewhat chunky, especially if related to quant or AI in tech.
There are enough exceptional people that also want to make money and/or are intrigued by the other draws of the work that we do, that afaik we have never tried to convince someone completely set on an academic career or who doesn't believe in working for a "business" to come work with us. That being said, employees at our firm uniformly appreciate the academic environment (after a certain level of comp, having sane work hours and doing a job you enjoy really matters) and it is a key component of job satisfaction. I think most of us would pass on a 30-50% raise if it meant having to go to a place with an investment bank style culture.
Out of curiosity, when you sane work hours, what does that entail? 50-60 per week or less?
What subject matter was your friend an expert in when they recieved that offer?
These offers will always exist in one-off scenarios with mostly academically-focused quant-type of firms. I can't really speak to those other than that as others have suggested, if a firm sees an intellectual horsepower in someone to solve complex issues which they believe only that person (or a handful of other people in the world) can solve, then they'll value them accordingly. I know a 2nd connection friend who got a similar offer from Citadel, granted not a million but still extremely high, out of his CS degree at a top-tier CS program. These things will always occur especially at shops which want to scoop up talent whether or not they're used or kept on the bench at times
To me, this isn’t surprising at all. The more surprising thing to me is that people with a lot of experience and skill in underperforming the market often make a similar amount as these kids.
If supposedly this is an “eat what you kill” business that is meritocratic, then we shouldn’t see this as surprising. What should be hard to understand is why analysts that underperform the market at long short funds are often paid more than these kids that, at some funds, consistently beat the market by a wide margin.
I have met these kids that make like $500K-$1M a very short time after school. They deserve it. They actually beat the market and there is not a shred of doubt it was due to their effort. What’s remarkable is how much of a well-kept secret these kids are. Most people don’t know they exist. There’s interesting reasons why this is the case, but I am amazed they don’t just go brag to their friends more or something.
This thread really opened my eyes to the value of HYP, definitely gonna try my best to get into an Ivy as a transfer now
You should definitely shoot for the stars, but grads aren’t getting these comp packages just because they go to HYP. At Harvard/princeton there are just a handful each year in the 400k+ range (probably fewer at Yale) and those students get those offers because of their intellect/mathematical accomplishments, being at HYP just gets them in the door. 1MM+ is more of a once every few years type comp package.
~300k is more standard for quant firms coming from undergrad, but again, students don’t get those offers from being at those types of schools, it still comes from proving their intellectual horsepower.
At Y & as of late there's a surprisingly (relatively) large # of people going into quant funds in the $400k+ range, but I do think H/P likely have slightly more per capita (perhaps there's some self-selection to those who pursue upper level maths at Y instead of at H/P, who knows?).
You misunderstand causality bro. They got into Harvard/MIT because they're this smart, the colleges didn't make them this way. The average Ivy kid is relatively unimpressive.
Not applying to ivies was definitely one of my biggest regrets though, I never really realised the potential of graduating from one. My scores and GPA were on par with Ivy standards but I always thought I’d do just as well if I graduated from a T50 and not stress myself too much during the application process. So I just applied ED to a mid tier T50 and was done with it
This probably got MS from some butthurt Ivy League grad. But yup, most well credentialed college kids are intelligent but not ultimately that impressive. The admissions process selects a lot of articulate, involved followers who don’t necessarily do much afterwards
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