S&T Bonus Structure

I know this topic has been "beaten to death", but I'm struggling to find decent bonus information for sales and trading roles in particular. I've done some fairly extensive searching but the vast majority of topics cover traditional IB bonuses rather than S&T.

I've gathered that S&T analysts get similar bonuses to IB analysts. How does this work? Are all S&T analysts put in the lowest tier? Or do they typically receive even less than that?

Also, at what point do S&T bonuses begin to vary from IB bonuses? It's my understanding that it's easier to start generating revenue earlier in your career (2nd year +) in sales and trading so I'm assuming that bonuses become performance based sooner. However, I haven't found much evidence to support or deny this assumption.

If I've legitimately failed to find the topic that answers these questions, I apologize and I'd sincerely appreciate a referral!

However, if the info hasn't really been touched on extensively, I'd love to hear from some of you in BB S&T roles about how bonuses are typically awarded and progress from analyst ---> associate ---> VP, etc. etc.

Thanks for your help and clarification!

Comments (20)

Apr 14, 2011

Analyst level S&T bonus is based on how your senior does. For example in trading at alot of places you actually get bonused by the trader rather than the firm. This might not be so true anymore but I know thats the way it used to be.

As for structure at the analyst level I imagine it would be similar to what IBD guys get. But once you learn the ropes it is totally dependent on your performance. In sales if you dont bring in the sales you dont get paid, same goes for trading if you dont make the firm money you dont get paid and vice versa if you make mega bank for the frim you get massive bonuses.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Apr 14, 2011

and how is your bonus determined in IBD? as an analyst you aren't anywhere near doing something thats gonna make the bank some money.

Apr 14, 2011
thor1000:

and how is your bonus determined in IBD? as an analyst you aren't anywhere near doing something thats gonna make the bank some money.

Politics

Apr 14, 2011
derivstrading:
thor1000:

and how is your bonus determined in IBD? as an analyst you aren't anywhere near doing something thats gonna make the bank some money.

Politics

so, its about getting yourself liked by the MD

Apr 14, 2011

its creative grammar... sort of like creative accounting, without the jail time. And what sort of thing can get you popular.. I would guess being good at valuations and pitchbooks doesnt make it happen...

Learn More

Boost your resume and land a finance job by passing the FINRA SIE. 264 pages & 1981 smart flashcards written by a former 8X top Fidelity instructor. Try it for 0 bananas here.

Nov 12, 2012

IBD bonus in most cases are discretionary, so if you are a rockstar, but happens to piss off everyone above you you will get a piece of coal for xmas and bottom bucket bonus.

In sales you eat what you kill once you are no longer in a junior position, at least that's how it works on my desk.

Nov 12, 2012

Well its not a bum deal if you compare it to other industries. Your post is very naive. The difference really doesnt matter because the tax man will take half of it anyways.

If you start working on markets you won't notice someone getting 5 or 15k more then you. You'll notice the guys who have new sports cars delivered to the office on bonus day.

Nov 12, 2012

maybe i sound naive...but i thought CDOs trading was a subset of correlation trading (i.e. add CDS, CMOs, etc...) isn't that the case?

Nov 12, 2012
desecrato:

My roommate brought this to my attention. Is it just me, or does the analyst system for S&T programs in BB firms seem misaligned?

As an analyst, your pay isn't tied to your desk, it's simply tied to your boss's review. They bucket all analysts into 3 or 4 categories, with each making like +$5,000 more than the next.

So let's say two people are in the 2005 analyst class. One does Prime Brokerage sales and works 55 hours a week. The other does Correlation trading and works 65 hours a week. The final one does CDOs and works 85 hours a week.

Let's say they all get good reviews. That means that they'll all grab the top bonus bucket, right?

How is that fair? I know you aren't paid by the hour, but it really seems like the CDO/correlations guys get screwed (especially because their desks are probably more profitable than PB). They're getting the same amount of money as the PB guy who leaves early every day.

So is it true that people on "easy" desks with market hours get rewarded more?

Maybe things even out 5 years down the line (and incentives are aligned with performance), but for people doing a 2-year stint before moving elsewhere, it seems a bum deal.

Just shut up and appreciate the opportunity.

Nov 12, 2012

Do you know this for a fact? I do not think all firms tier their analysts this way. Some pay on a grown up bonus schedule and pay a stub the first year, so of like associates receive.

Nov 12, 2012

Any value-added responses?

the tax man will take half of it anyways

not really. if you look at a federal tax schedule, the highest bracket pays only 35%. analysts' salaries put you in the 2nd or 3rd tier, which is a much lower rate.

thought CDOs trading was a subset of correlation trading

I think you're wrong, but it was just an example of a group that works longer/harder than others

if you start working on markets you won't notice someone getting 5 or 15k more then you

a.) my point is about the money, it's about principle/fairness. I wouldn't care if it were $5 more. b.) even if it were about money, if you look at the all-in opportunity cost, tell me if it's fair for someone who's working 40% more than another person to be paid the same.

Do you know this for a fact?

yes, these things are pretty straight across the street

Nov 12, 2012
desecrato:

a.) my point is about the money, it's about principle/fairness. I wouldn't care if it were $5 more. b.) even if it were about money, if you look at the all-in opportunity cost, tell me if it's fair for someone who's working 40% more than another person to be paid the same.

first off, you need to get away from these ideas of "fairness". no one cares in this biz about your perception of fair.

and you need to have an eye to future earning potential/skillset. so who cares if your analyst bonuses are the same...5 years out your correlation background will probably serve you better than prime brokerage.

Nov 12, 2012

I'm at the airport, so I'll take the time to answer this question..basically it depends. I've found that S & T analyst bonuses have a much higher variance than IBD bonuses. Basically it really depends on what desk you are on and how much money they make for the bank. For example at JP, 1st and 2nd analysts on the energy trading desk made bonuses over 100k. However, analysts on cash trading (equities) made between 40 - and 50. Equity derivative analysts made bw 55 - 75, etc. I don't know exactly how much the FI structuring guys (they work the longest hours) made, but I know it was comparable to other FI desks(meaning probably around 55k - 70k).

One thing that people on this board don't seem to understand is that you are not compensated based on how many hours you work. If anyone tells you otherwise, they are completely wrong. Your group gets allotted a certain bonus amount and you get paid based off of that - im talking about S & T here. HTH

Nov 12, 2012

Sorry - tax wise I'm talking UK. It's not half but its over 40%

As for you being naive. I'm talking about you trying to base your pay on hours worked. The amount of hours you work counts for nothing.

It's not unfair its just the area you go into plain and simple. Don't like it move into another area.

Nov 12, 2012

What if your group loses money?

Nov 12, 2012

It's not unfair, because it is a 2-year probationary period, when chances are your trading responsibilities wont involve taking insane amounts of risk (i know, there are exceptions, but on average); therefore, you aren't necessarily to be blamed for desk losses, nor credited for desk gains. Therefore, regardless of PB Sales or Correlation (which works with CDOs, but isn't a subset or parent), it's not about P&L as much as value-added to the desk, which is only partially seen through P&L (it's seen directly through the manager's view of you as a workhorse).

Re: hours, you can't add value when the rest of the desk is gone, and after those 2 years, the desks that work fewer hours could potentially have less lucrative horizons.

Nov 12, 2012

why does everyone in this board thing more work = more money. once you get that notion out of your head you will be better.

the reason pay doesn't differ much between groups is a 1st year is probably not that much different in productivity between groups. you pretty much are learning for the first year anyways.

you aren't taking real risk = you are not really getting paid.

Nov 12, 2012
Comment