How to Answer Salary Question in Email?

Kurt Rambis's picture
Rank: Chimp | 4

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

If I were asked this question, id just tell him from my research on the analyst salaries at small to mid size firms, the range is about xx-xx. I think he understands that u have cost of living expenses..

Sep 9, 2010

I defer until they basically demand it. Usually, a nicer version of "my expectations are to be paid what the job pays".

Sep 9, 2010

Thanks guys, I appreciate it. I was just thrown off guard by the question in the email. My only experience has been face-to-face when discussing this matter.

Sep 9, 2010

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"...

Sep 9, 2010

Largely agree with the above.

If you want to leave yourself a little wiggle room on the off chance he can't afford your price, you can mention that the salary or total compensation would be a function of the requirements of the job.

Sep 9, 2010

I think a good way to respond would be as follows:

"In terms of compensation, I'd be willing to entertain a competitive offer."

Sep 9, 2010

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

OP, I know what firm you're talking about. You should be able to request 60-70 base. Give them that range, and tell them it's based on your research of other firms. I don't know why they're asking, they should have just offered you something in that range.

How many years of experience do you have? Congrats on your offer.

Sep 9, 2010

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

Thanks again everyone, you were all really helpfull. Beers on me!
ThaVanBurenBoyz - I've had two previous SA stints

Sep 10, 2010

Just out of curiosity how are they offering you an associate role? Do they not have analyst level? Or are you just really special?

Sep 10, 2010

Aren't equity research titles flip flopped. So you enter as an associate and move up to analyst.

Sep 10, 2010

associate is the entry level I think.

I would like to hear about this too. If you don't mind could you share about how you get in please?

Thanks a lot

Sep 10, 2010

I did an equity research internship at another boutique in the same region...and after my freshman year, I interned at the same bank but in a different capacity (more IB) related. I graduated near top of my class (3.8) magna cum laude, 3 honor societies, etc. Do you really think that it is that hard to believe?

Any suggestions on salary and bonus?

Smokey, this is not 'Nam, this is bowling. There are rules.

Sep 10, 2010

stop trying to hijack the damn thread. If you have a question then start a new thread, it's not hard.

Anyways, back to the OP....hmm, I'm guessing this is Stifel? If so, and considering you're coming out of undergrad, I think anywhere between 40-70K base could be expected w/ bonus of anywhere from 25-50%. Could be more, but I doubt it given the current market and the fact people are willing to work for peanuts right now. ER comp is highly variable depending on shop, location, experience, industry, the strength of your S&T team if applicable.

Sep 10, 2010

You were almost right on towards the lower end

Smokey, this is not 'Nam, this is bowling. There are rules.

Sep 10, 2010

You sure you want to be in Baltimore? There are other cities that will pay towards the higher end. But then you have just an undergrad and no industry knowledge. Internship helps, but the firms know there are a lot more people out there looking for jobs than jobs available. Take whatever you can get, and hope you get a large bonus at the end of the year.

Sep 10, 2010

if it is Stifel, If I am not mistaken, they have a very reputable research division.

Sep 10, 2010

The situation sounds abnormal to me so it would be difficult to say...Senior trader 2-3 years out of college? Unless this kid is a Brian Hunter pre Amaranth blow up I dont think he would be a senior anything and again comp is highly contingent upon the group's P&L and the trader's position within the group. I think comp would be in a wide range (200k - 600k) depending on performance.

Sep 10, 2010

Thanks. Anyone else?

Sep 10, 2010

Bump

Sep 10, 2010

agree with junk bond swap

Sep 10, 2010

Negotiable

Sep 10, 2010

I don't believe that summer intern salaries are typically negotiable/flexible.

Sep 10, 2010
asiamoney:

I don't believe that summer intern salaries are typically negotiable/flexible.

Hmm, so what's the best thing to do? Say nothing or say something else?

Sep 10, 2010

0-99999

Sep 10, 2010
Boreed:

0-99999

0-10MM

Sep 10, 2010
Sep 10, 2010

Say nothing

Sep 10, 2010

If you feel you must write something, write "negotiable." I'm told that's pretty common.

Sep 10, 2010

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.

Sep 10, 2010
sxh6321:

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.

Exactly, if you don't know what the going rate don't shoot yourself in the foot. Negotiable sounds like you want to negotiate before you've accomplished anything.

Sep 10, 2010
sxh6321:

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.

I agree, that sounds better than negotiable.

Sep 10, 2010

Market Competitive.

"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"

Sep 10, 2010

One should avoid quoting the amount.
It should be like "I am expecting a salary which reflects my credentials and the expertise that I bring to the role."

I hope this answer would help you.

Sep 10, 2010

those offers are terrible. Citi has offices in Miami, why not give it a try?

Sep 10, 2010

I wasn't aware there was any BB presence outside of Private Banking. Would you happen to have the contact of any banker there? If so, could you please PM me.

Sep 10, 2010

50-70k with a discretionary bonus would be my best guess. Might be able to get a bit more base since you have some valuation experience.

Sep 10, 2010

If you can fill it in: "Market"
If it is a drop-down selection or has to be numeric: "0"
If someone asks in an interview: "Are you making me an offer?"

Only somewhat kidding on the last one.

Sep 10, 2010

"I am expecting $25MM+ per year , but can imagine working for a little less in ideal scenarios. Can I meet some of the younger people on your team?

Sep 10, 2010

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

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
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