Q&A: Top Quant Firms First Year Comp 250k to 400k

First some background, I am a senior and am heading to a quant shop for full time this summer. This past recruiting cycle I received offers from Two Sigma, Citadel, Old Mission, Hudson River Trading, DE Shaw, Jump, and Five Rings Capital for positions ranging from pure dev to pure quant. I study CS and go to a decently well known school but definitely not a target or semi-target. Though, I have managed a high GPA and good internships (Google/Facebook). I have seen some discussion on this site about first year compensation at quant shops and there is quite a bit of misleading information. I wanted to help clear the air of some misconceptions and answer any questions as I had a tough time learning about the industry. From lowest to highest first year compensation, the companies went Two Sigma, DE Shaw, Five Rings, Jump, Old Mission, Hudson River Trading, and Citadel. Two Sigma was 250k first year all in (150k base, 50k sign, 50k guaranteed bonus) and Citadel was 400k first year (150k base, 150k sign, 100k guaranteed bonus). HRT and Old Mission had the highest base and highest base + guaranteed bonus. There was not a significant difference between compensation for quants and devs, at least first year. Both the Two Sigma and Citadel positions were quant dev. All these offers started a bit lower but climbed up after negotiations. Aside from the quant firms, I also had offers from tech companies. Most of the interviews were quite algorithms and statistics focused which did require a bit of preparation. The smaller the shop, the more specialized the interviews.

Comments (130)

Jan 19, 2019 - 5:22pm

How did you prepare for the quant interviews? What kinds of resources did you use and what specific topics (if any) seemed to reappear throughout your interviews? Thanks!

Jan 19, 2019 - 7:27pm
quantfin:

There was not a significant difference between compensation for quants and devs, at least first year. Both the Two Sigma and Citadel positions were quant dev.

Yes, in fact developers will probably make a little more over the first 4-5 years. As a developer you are, however, a cost center while a quant should sooner or later develop his own alpha and move into a PM/trader seat.
I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
  • 2
Jan 19, 2019 - 10:35pm

This is quite a big generalization and not true for all firms. Usually at these top firms, devs are not treated as a "cost center" otherwise the top devs in the country will not work there. This is especially important in latency sensitive companies where a decrease in latency from an engineering perspective directly translates to higher P/L. I will say that quants typically do make more after a few years.

Jan 20, 2019 - 11:11am
quantfin:

This is quite a big generalization and not true for all firms. Usually at these top firms, devs are not treated as a "cost center" otherwise the top devs in the country will not work there. This is especially important in latency sensitive companies where a decrease in latency from an engineering perspective directly translates to higher P/L. I will say that quants typically do make more after a few years.

It's a generalization which is based on my experience in the industry. A developer might not be treated as a cost center, which is important (and HFT firms do pay developers well) but in the modern environment he/she still is one. What do you think would happen if that feed handler (or whatever else) can be replaced by an off-the shelf product?

For better or for worse, low latency software development skillset has been heavily commoditized and you can get 2nd tier latency pretty much off the shelf these days. I have some latency-sensitive strategies that I am deploying with very little development of my own, for example.

I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
  • 6
May 14, 2019 - 5:40pm

Seconding this. Any strategy that cares about latency will not treat devs as a cost center. They are not as important as quant researchers perhaps, but certainly on par with traders.

That being said, I think for strategies where latency is not a key factor in a strategy's profitability, the odds of being treated as cost center go up a fair amount- though of course it varies by firm and pay will be "pretty good" regardless.

Nov 15, 2021 - 10:00am

This is an oft repeated generalization that doesn't hold in many cases. Some firms are 100% algorithmic and don't even have a "trader" role and some firms rely on strategies that are latency sensitive where a C++ dev shaving some time off the trades with clever code optimizations absolutely does generate "alpha."

In any case the "cost center" / value generator dichotomy present on this site doesn't apply in quant firms in the same way it does for banks and consulting firms where front office folks are the product itself, and it's really not an especially useful paradigm for making career decisions in the industry IMO. I say this as a dev in the industry, so I'm definitely biased, but I know at least at my firm devs are considered equally important to quant researchers

Most Helpful
Jan 21, 2019 - 2:58am
  1. The distinction between trader and quant vary greatly depending on the firm. At some firms, trader is a back office role where you just execute the trades from someone else's strategy or perhaps look at a dashboard and step in when a position looks off. At other firms, traders are front office and the ones devising the strategies. The titles quant, quant researcher, trader, quant trader can mean different things at different firms. Being a trader at Jane Street is pretty awesome but a trader at Two Sigma is back office (they only have a few traders).
  2. Salary progression again varies significantly depending on not only your personal performance but also your team's and company's performance. Also, depending on the firm, the payout structure can be quite different. Though Tower and HRT are both in the high frequency space, Tower's teams are much more siloed meaning that superstar teams will be paid very very much but there is only a handful of them. Whereas at HRT, everyone can see the details of very strategy and the performance of every team. Starting out as a new grad making 250-300k/year, my recruiters quoted me that within 5 years I should expect to at least double my pay but perhaps more if I perform well (take that with a grain of salt as it comes from a recruiter).
  3. A lot of firms hire directly from undergrad though the process is very competitive. I would estimate that combined, the top firms hire fewer than 60 quants directly from undergrad every year. There is a much higher representation of quants with PhD backgrounds.
Jan 21, 2019 - 10:45am
quantfin:

Starting out as a new grad making 250-300k/year, my recruiters quoted me that within 5 years I should expect to at least double my pay but perhaps more if I perform well (take that with a grain of salt as it comes from a recruiter).

Yeah, anything a recruiter feeds you requires a brick of salt.

Researcher salary flattens out very quickly unless you are in a seat that is directly driving PnL and you have a boss that recognizes your value. Usually there would be some alpha/strategy directly attached to your name and the boss/firm is worried that you are going to walk away with it.

Developer salary flattens even quicker, since it's a commodity skillset. From the business perspective, a developer leaving is just a pain in the ass since you have to find a new one and wait for him/her to get up to speed.

PS. btw, I worked as a PM at one of the firms you've mentioned and it's possible that I am working currently for the firm you gonna work for

quantfin:

1. The distinction between trader and quant vary greatly depending on the firm. At some firms, trader is a back office role where you just execute the trades from someone else's strategy or perhaps look at a dashboard and step in when a position looks off. At other firms, traders are front office and the ones devising the strategies. The titles quant, quant researcher, trader, quant trader can mean different things at different firms. Being a trader at Jane Street is pretty awesome but a trader at Two Sigma is back office (they only have a few traders).

The name of the role is irrelevant, lot's of firms would have 2-3 role names and push everyone into these roles. However, I think there are 2 orthogonal directions that do matter. First is "does the firm make money based on your personal alpha that can not be easily reproduced if you leave?". Second is "do you get paid based on your performance (ideally hard dollar formula) or based on some nebulous contribution?".
I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
  • 8
  • 1
Jan 21, 2019 - 11:47am

Congrats on your offers and thanks a lot for doing this!

Coming from a school that's not a target or semi-target, how were you able to get in touch with the recruiters at the firms you mentioned/get past the initial resume screen? I heard they hire the majority of their class from HYP/MIT.

Also, on average, how would you describe the distributions of interview questions between machine learning, whiteboard coding, statistics, etc?

Jan 21, 2019 - 12:03pm

I mostly applied online or directly reached out to recruiters on LinkedIn/email (found emails by asking friends/guessing their email). I've found that, bar some, most quant firms are very open to interviewing candidates that aren't from a target or semi-target. They mostly care that you are up to both their technical and culture bar. Many of the people working at these firms are heavily skewed towards Harvard/MIT because that's where a lot of bright people go to school and where a lot of on campus recruiting happens.

If you reach out yourself/get a referral and have a decent resume, many firms will be open to speaking with you no matter the school. This is especially true with larger firms like Two Sigma, Jane Street, etc. The interviews will still be quite difficult, though, and most people will be filtered out during phone calls. It is more difficult, however, to do so for smaller firms where they only hire a handful of people every year and give precedence to their alma matter (I got filtered out by a few places this way).

The interview questions really depend on the role and firm. Some places like a developer at HRT may require low level systems knowledge whereas traders at Jane Street will play market making games. Overall, for more quantitative roles there are often brainteasers, statistics (perhaps derive linear regression), and some machine learning. More often now, quants are expected to have a solid programming background and will also have whiteboard coding interviews.

Jan 21, 2019 - 5:13pm

Wow dude first of all congratulations! I know how insanely hard it is to receive an offer from even one of those firms, let alone so many of them as an undergrad. I know you said you read on statistics/machine learning and practiced leetcode for the interviews, but is there anything you did during college (clubs/organizations, side projects, research) that you think significantly helped you land those offers?

Jan 22, 2019 - 10:39am

When I was negotiating, I couldn't in good faith ping pong offers back and forth in a bidding war too many times, especially for a company I was most likely not going to accept. So, I tried to limit as much as possible the amount of times I negotiated with a company.

I first let company show me their offer without them knowing the details of my other offers. Then, I showed my highest offer to every other company. Afterwards, I took the highest from the updated offers back to the original highest offer to see if they could go any higher. If there is an update and the company you want most is not the highest offer, bring them the new highest offer to negotiate. At this point, you've negotiated at most twice with any company which I believe is acceptable. Lastly and optional, if you really feel like you can push it a bit, ask your top company if current + X would be possible and you would accept if they could do it. I have seen a few of my friends do that and be successful though I didn't do it personally.

Jan 22, 2019 - 10:39am

Can someone else verify and/or OP elaborate on 250-400k being the range for ~60 seats for quants straight out of undergrad? I know one person who started at one of the firms OP mentioned for >160k base which presumably puts him well within that range, but he was in the top handful out of a top CS program. I know that range is possible; just unsure whether it's more than just genius level, single-digit or so ad hoc cases and there really are as many as 60 such spots available for undergrads.

  • 2
Jan 22, 2019 - 10:50am

60 quants was a very back of the envelope estimate though I do believe it is in the ball park +/- 10's of students. Perhaps 30-40 is closer? Someone else's input would be appreciated also.

I personally know a few quants who will fall in that range next year and I definitely don't think my network covers the majority of people considering I don't go to a target school. Even just looking at larger firms like Two Sigma, Jane Street, Citadel and D.E. Shaw, they each hire a handful of quants straight from undergrad, themselves bringing the total in the 10's of people. If you include new grad devs at quant firms making in this range, the number could be much higher (if you don't just look at quant firms, I have a few friends making 250k even at Google and Facebook). Though for the upper range of 400k, I would estimate that there would only be 5-10 undergrads total making in this much.

EDIT: Every year there's about 80 IMO and IOI gold medalists and I'm sure a majority of these gold medalists can land a job as a quant (though they might not want to or maybe aren't a good culture fit).

Jan 22, 2019 - 4:57pm

Based on my experience at a target school, I think ~50 is in the right ball-park, but like you said, it really depends what you consider a "quant". At a shop like HRT you have algo developers which aren't quants nominally (since they have actual quant research positions), but are still paid in the 250-400k range.

If you're looking at any jobs at quant firms that pay first years 250+ all-in, I think the number is a lot higher since these firms tend to compensate devs comparably with quants. Similarly, at these firms there are trading roles that are compensated similarly which you may or may not consider quant (being a trader at JS definitely requires quantitative skills even if it's not nominally a quant role).

As for the 400k and 400k plus range, I think it's probably larger than 5-10. At the very least, Citadel is consistently willing to negotiate to there (unless my friends are repeatedly posting all across the internet) which should bring it to 5-10 by themselves. I've also heard of other firms going there after negotiations, but maybe as more ad-hoc situations.

Array
  • 4
Nov 15, 2021 - 12:26pm

The ~400k first year offer (including 75-100k sign on, so not recurring) is now standard at top shops like Jane Street Capital and HRT. Hard to say how many new grads these firms hire but I'd estimate it's in the low hundreds. This is including all technical roles i.e. quant research, quant trader, and developer. See levels.fyi for data points (best website for info on comp for technical positions)

Jan 22, 2019 - 6:17pm

Really appreciate this. I am from a target and I landed a summer internship at one of the firms you mentioned, which is giving me Pro-Rated 125k/year as well as housing. I had to negotiate this up to get it where it is. I thought this was already pretty fair, assuming ~100% year-end bonus and some sign-on bonus (assuming I work in this role or a similar one after graduation), but the numbers you're quoting are higher than I expected.

Are they going to up their offer if they give me a full-time to something in line with those numbers, or should I apply elsewhere for negotiation purposes? (Note: the role isn't strictly quant, it's a "quant-trader" role, which does not require substantial CS background, as there are other roles who end up writing most of the code)

Jan 22, 2019 - 9:22pm

Congrats on the offers!

Few questions:
1. Did you find (whether your own experience or your friends') that the interview processes/questions were broadly different for-- devs/traders/research? I understand there are many hybrid roles nowadays, but I'm asking primarily to understand what strengths to beef up for which role interviews.

  1. Seems like a lot of these firms don't look for the mathematical finance bit of things as much (could be wrong). Specifically for the quant trader path, would you say strengths in CS subjects like algorithms etc are better use of time learning than studying say finance inclined subjects eg options?

Sent you a PM as well, when you have the time. Best of luck!

Jan 28, 2019 - 1:09am

IMC's all-in offer this year was 230K-280K. Akuna's is actually quite high and competitive with the top shops out there, due to the massive bonus you can earn first year if you perform well. The range is 280K-390K

Jan 28, 2019 - 11:09pm

I know for a fact that this is correct for Citadel so I assume that the others are correct too. Not every new grad gets this offer, but it's not a crazy outlier offer either. Yes I also know of experienced people in the same role at Citadel who don't make this much.

Feb 3, 2019 - 2:44pm

I mean, it's pretty disingenuous because they're including signing bonuses as "total comp". Actual total comp is like $175-250 then you have signing bonus that range from $50 to $150 (Citadel),

Array
Nov 15, 2021 - 12:42pm

Recurring comp over 300k now. We do include signing bonus bc expected raise after 1-2 years more than exceeds the signing bonus in most cases so it's kind of misleading not to include it. Agreed that's not standard for reporting comp outside tech roles so can be misleading 

Feb 3, 2019 - 2:19pm

I heavily valued the culture of the firm. My picture was built from general things I've heard people say online/in passing, first hand experience from trusted friends, and meeting the employees themselves. I also placed emphasis on growth opportunities at each firm. I looked at where people where leaving to go to on LinkedIn to see the various exit opportunities. Everything else equal, it came down to compensation.

The firm I ended up choosing treats their employees extremely well and has a very collaborative culture. To me, it's not worth getting paid more if your entire life is work and you dislike it. Would be happy to go into more details over PM. Curious to hear which decision you ended up making too!

Feb 3, 2019 - 3:21pm

What did you study in college? I'm a senior in HS and am mostly likely going to a non-target, and then transferring to a target second or third year. Looking at options I have an whatnot. Sounds like you did a lot of great networking in college.

Feb 3, 2019 - 3:37pm

I'm finishing up my degree in CS right now. I didn't do too much networking in school, most of the people I met were during internships over the summer. At least for quant finance, your network doesn't matter too much. Firms will hire you if you are up to their technical bar. A lot of the firms I interviewed with I simply applied online. Once you've had one or two good internships, most places will want to interview you. Though, opportunities does come much easier to those are target schools. They will have a lot of on campus recruiting and sometimes very small firms will only hire from target schools.

Feb 9, 2019 - 11:21am

could you list out, in practical terms, what knowledge is needed to grab one of these quant dev roles?

i'm self-teaching myself machine learning (mostly neural nets) in Python from a variety of online resources (which are surprisingly good). I took a few CS classes in college (C++, object oriented design, databases, operating systems, basic hardware design) but was an econ major (so, no CS degree). College was ~20 years ago, so i don't remember all of it, but enough to be basically literate (and i worked as an Excel VBA programmer for the first few years of my career).

Coming from a semi-technical background, if i wanted to learn the skills to grab one of these 300k-400k quant roles, what exactly would i need to learn?
Which math/programming/algorithm concepts are really necessary?

just google it...you're welcome
  • 1
Feb 12, 2019 - 9:50am

Jesus fuck dude $400K? Why would anyone pay a recent grad that?

Dayman?
Feb 15, 2019 - 3:14pm

Yeah dude facts. Congrats on getting these offers, that is a mindblowing amount of money. Have fun with it :)

Dayman?
Mar 6, 2019 - 9:41am

Do you know what recruiting looks like for people who are out of school? I'll be going to a top tech company as a dev, but my ultimate goal is to get into a quant firm. The thing is that it looks like most get hired either as new grads or new PhDs.

Aug 14, 2019 - 6:42pm

Impedit reprehenderit voluptas laborum qui sapiente magni harum nulla. A dolorum aliquid mollitia rerum enim nam beatae. Odit eos suscipit sit officiis non illo. Asperiores quia alias voluptates officiis.

Eos eum distinctio ab nesciunt voluptatum animi. Beatae facilis unde qui eos aut.

Illum sed dignissimos et porro consequatur. Sed doloremque quam nisi ipsam. Minima distinctio provident voluptate rerum. Aliquam hic atque debitis aperiam. Eum molestias aspernatur ad necessitatibus.

Quibusdam commodi vel est quae. Debitis neque numquam aut molestiae. Et iusto asperiores fugiat. Placeat dicta explicabo tempora rerum officiis.

Aug 15, 2019 - 10:25pm

Doloremque recusandae deleniti non explicabo saepe sunt tempore nostrum. Suscipit at dicta explicabo. Molestiae neque autem vel ut quo. Nostrum quae nam non quis. Et rerum velit non. Incidunt aperiam maxime perspiciatis et impedit illo aut voluptatem. Eligendi consequuntur ut similique amet quod qui.

Officiis cupiditate laborum eum voluptas deleniti. Neque odio id dolorem enim ut ex voluptate. Est aut temporibus voluptatem necessitatibus possimus odio omnis facere.

Start Discussion

Total Avg Compensation

January 2022 Investment Banking

  • Director/MD (5) $604
  • Vice President (22) $385
  • Associates (148) $241
  • 2nd Year Analyst (85) $153
  • 3rd+ Year Analyst (15) $150
  • 1st Year Analyst (296) $142
  • Intern/Summer Associate (64) $142
  • Intern/Summer Analyst (225) $90