Stupidly low bonus. Should I jump ship?

Quick summary: graduated 12 months ago, been working at this 5 man M&A boutique for around 8 months. Was promised quarterly bonuses and a split on execution fees. Base salary was low @ $50k but still took it.

Fast forward to last week: haven't been paid any of the quarterly bonuses up until now cos the CEO is saying we're drying up on deal flow and cash. I was given a bonus of $3.5k before tax, so I'm gonna be left with fuck-all.

Was also given a $5k pay bump after 8 months. So now I'm at $55k and a measly bonus. Hours are pretty decent (never worked past 60 hours, only 1 weekend in 8 months). Still, I feel like I've been cheated over a minimal pay bump and a very low bonus. As for splits on execution, they're stupidly stingy about that, and I'm not banking on getting more than $10k per deal, once again pre-tax. We might close 3 deals next fiscal, so around $30k or some shit pre-tax.

Was promised 4 bonuses; only received 1 so far. Doesn't look like I'll get another bonus for another 6 months, and wont be more than $5k. I'm currently an analyst but also do associate-level work.

Should I start looking elsewhere? 3.0GPA with decent internship experience.

Thanks

Comments (38)

Dec 9, 2018

Couple of quick points:
i) If there are solvency concerns (which I think the seniors guy are likely embellishing), start looking
ii) If what they said about compensation was truthful and their end...I'm a bit lost on the economics of how they'll close 3 deals (assuming sell-side M&A) and are "drying up on cash"...would figure there is some buffer via retainers or something...and overhead should be relatively low for a 5 man shop
iii) Not knowing anymore of your background, 3.0 GPA will be your biggest hurdle, but your internship + full time experience should allow you to pivot with relative ease (assuming you put in the networking work and prep accordingly for interviews).
iv) Just for your own sanity, you've only worked 1 year there, so people are going to be receptive to why you are leaving....as always...have a good story
v) Money is important, but don't leave because of the low base and low bonus, you are an analyst just starting off your career, money will be made in multiples down the road. Leave because you can get better branding and experience, this will position you well for the future

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Dec 9, 2018

Thanks chief. I'll address each point.

  1. CEO keeps saying we're running dry. Haven't closed a deal in 6 months.
  2. We do charge retainers but in all honesty its a token figure. Nowhere near enough to cover overheads. We deal with clients with EVs of <$10m, so the fees we charge arent super high.
  3. I agree. 3.0 is a killer. I've got a decent network out there at MM firms. I'm doing my best to see what can be done for me.
  4. I sure hope so..
  5. Money is really important to me atm. I'm supporting a family + have lots of expenses I need to cover.

I'm kind of lost, as you can tell. Would appreciate some guidance as to next steps.

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Dec 9, 2018

My opinion and you ultimately must get others and decided for yourself, is that you should start aggressively searching. The ultimate driver is that you likely can find another opportunity in IB, whether that is LMM, MM, or BB, that will provide you with better training, deal experience, branding, and future opportunities.

My broad guidance to you is to get organized and formulate your plan of attack. At a minimum that is making a list of companies and individuals in select cities and to start mining that list (Setting up phone calls, coffees, cold calling, cold e-mailing, alumni connections, etc.) Make sure you have your story on point before reaching out that addresses your reason for leaving , why XYZ firm, and your 3.0. Your hours are light for an analyst, a blessing in this scenario. Do not let that free time go to waste.

I'll reiterate, with the right effort and organization, it is very likely you'll be able to land somewhere significantly better than where you are now. Remember, your career isn't linear and it is a marathon, each step you take should be take in that context and ultimately how you personally define success. Encourage you to solicit other people's advice as well so you can make an informed decision about your situation.

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Funniest
Dec 10, 2018

This is the most banker nonsense response I have ever read.

Good work, I echo everything.

Dec 9, 2018

Thank you so much Skyline. I've already began aggresively networking, and have a coffee meetup with an MD at a reputable MM firm. They operate within a diffferent sector than what I cover, but will try and spin my story.

Any advice as to how to approach an informational itnerview? Last night I decided I've had enough of the bullshit at this firm and I'm gonna jump ship.

    • 1
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Dec 9, 2018

Great to hear that you have something lined up with an MD. Broadly speaking for informational interviews given your experience, have your story on why you are leaving only after a year, have your technicals locked and loaded in case they pop up (unlikely with MD, but always be prepared), and understand that the conversation often deviates to random interest, hobbies, where you grew up, etc. It's really had to give you blanket guidance on informational interviews, but the more you do them, the easier they become.

Last thing I'll say, is to not worry about the sector. Unless you are in a niche IB sector (Real Estate, FIG, Infra, and Energy), at your level and experience, I would find it extremely surprising if anyone is going to remotely view you as a "specialist", so no need to even worry about "spinning" it there. Frankly, I wouldn't be concerned even if you said you were in one of those aformentioned sectors. On the flip side, try to avoid saying you joined your current firm specifically because of XYZ sector, or else you put yourself in a tough situation when trying to lateral outside that sector. Be tactful and spin your story and experiences based on your audience.

Good luck out there, keep everyone posted here

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Most Helpful
Dec 11, 2018

IMHO you're overthinking it. You're an experienced analyst, first and foremost. When we needed experienced analysts at the EB I worked at, we often got candidates with no IB experience who were trying to pivot. E.g. 2 years of ER or 2 years of CF and trying to make that count for 1 year of IB and join us as a 2nd year. Of course we also got some solid IB folks, but not many. Think about it . . most good analysts are looking to PE after less than a year, and others can stay at their bank. Not many are available as laterals.

So take all that other shit . . GPA, story etc . . and understand that it's secondary. Your experience is a major plus and if you can sell that well (know your deals, know your technicals) then you shouldn't have too tough a time. Get the hell out of that place, there's way more than enough red flags.

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Dec 11, 2018

Call contacts at other banks and have them submit your resume. Call headhunters for the remaining banks. To me, biggest mistake you can make is slow playing it . . coffee chats and all that stuff. If that's necessary at a particular bank (because you need to re-acquaint with your contact or whatever) then fine, get a quick coffee. But in general you should be confident and get your resume out there. As I detailed in another post below, you're a good lateral analyst candidate. I won't say shoe-in, but certainly straightforward. Not a complicated situation.

Dec 10, 2018

The base pay is terrible and unfortunately future bonus promises are usually meaningless but I'd be far more concerned that this place is going out of business within the next year.

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Dec 9, 2018

I agree. The CEO keeps whinging about money and "whether we'll still be in business in a few months". Colleagues tell me he always whinges, but it still rubs me the wrong way and creates a toxic atmosphere to be in.

Dec 10, 2018
Throwaway4days:

I agree. The CEO keeps whinging about money and "whether we'll still be in business in a few months". Colleagues tell me he always whinges, but it still rubs me the wrong way and creates a toxic atmosphere to be in.

If they're not closing transactions they're frauds. End of story. I'd get out asap.

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Dec 10, 2018

Interview elsewhere, get an offer @ higher pay, leverage that for a bump in pay or a bonus. If they refuse, go to the new job.

Dec 10, 2018

Just something in relation to jumping ship, network with a wide range of firms and try to 'synchronize' the processes, what I mean by that when you get to the interview stage try to have more than one firm at this stage, so that in case you land an offer, you can leverage it for the other firms and additionally it will give you a choice at the end if you land two offers - ie not having to take an extreme sweatshop or firm with a decent pay but no exposure.
I am aware that this won't be easy as most firms will recruit on a need basis for such positions.

Dec 12, 2018

IMHO I don't think presenting your current employer with another job offer to increase your compensation is a good idea. If your current company does decide to pay you more ( and not let you go for being disloyal), moving you will be constantly scrutinized and have to rebuild any sliver of trust you have gained with your shop in the first 8 months... Just my opinion.

Dec 10, 2018

Never said that, just said if you are interviewing elsewhere try to be interviewing elsewhere at more than one place.

Dec 10, 2018

I'd jump ship.

Dec 11, 2018

How's the market in your area? Any headhunters reaching out theough LinkedIn to present opportunities elsewhere? If so, jump. Also, as mentioned, if there's a chance you'll be left without a job because they'll cut you due to financial issues, start looking now. Leverage your experience on recent deals (although it seems like you guys haven't closed anything recently) or recent mandates on which you worked. Make a list of the work you've accomplished in each of your projects to be able to adequately describe your level of exposure in each of them during interviews. Leverage your associate-level work as well.

Dec 11, 2018

Are you getting screwed? Probably. But, you are the low man in a 5 person shop that is working on microcap deals (are you an actual IB or just a business brokerage)?), so I'm not surprised reading about similar situations on this site.

You undoubtedly could gain more by moving to a larger firm, MM or otherwise. However, be mindful of the fact that you: A) may not have great deal experience so there will be a learning curve, B) are going to be working significantly more hours and C) will have much more focused and structured tasks. I'm not suggesting that analysts aren't being stretched to do associate-level work, but it will be more rare than your current shop because of the larger and formalized deal team structure.

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Dec 11, 2018

GTFO

Coming from an M&A boutique in a non-core geography, you could get a spot at a lower bulge bracket or middle market bank in NY just fine and get paid 85K +50K bonus. Would work way more though.

Dec 11, 2018

Bigger reason to jump b/c they're dishonest rather than the low salary

What concert costs 45 cents? 50 Cent feat. Nickelback.

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Dec 12, 2018

Agreed. Trust is an issue. If you stay, you're agreeing to be lied to.

Dec 11, 2018

@Throwaway4days, I was in a similar position. I started at a boutique with a $50k salary and then jumped to a MM IB after a year. Google "Sil's lateraling guide" and click on the first link. Read that. It will give you all the information you need.

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Dec 12, 2018

I would jump ship, they lied or are headed for disaster. Either way, you should look for a way to exit stealthily.

Dec 12, 2018

From what I understand, you are saying that you are making $55K plus a (small) $3.5k bonus, plus ~three $10k splits per year. So that comes to ~$90k which is not bad for <60 hours per week, and echoing what some others have said: money should not be the driver behind early career decisions. Your primary concern should be to get experience so that you can get paid more down the line.
Buuut, what seems concerning to me are the solvency issues and the "not straightforward" way they seem to be dealing with your pay. These two alone (especially the second) would be a non-starter for me. It's important to be able to trust the people you work with, especially early in your career since you will be learning from them.
Now...
A 3.0 GPA isn't a great look, but experience is more important. You've already "made it" in somewhere, so you're not starting from ground zero. I would network and try to move out.

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Dec 12, 2018

I'd probably have to disagree with you about the money part. Its more likely than not that if they are paying you at a high level than its more likely than not that you are doing high-level work. This is especially true if you work in a mature industry such as banking, where pretty much all processes for closing a transaction are very similar to other banks. On the other hand, if he was to work for a tech firm where the growth potential is there but pay may be on the lower end of the spectrum, then that's completely different.

Dec 12, 2018

I'll echo some of the previous comments. If you're getting lied to and the deals are crap, that's why you should be leaving. Probably going to be impossible to jump right now. Bonuses are getting ready to pay and no one is leaving of their own volition before that.

See if you can get coffee with MD's or staffers, but don't be offended or put off if people are out for the holidays. Deal flow will pick up after the beginning of the new year and those analysts going into PE are leaving after bonuses pay out. The only other suggestions I would make:

  • Find out which shops pay analyst bonuses in Jan-Mar. Some only pay bonus in the summer to avoid the analyst exodus and subsequent gap in the Spring
  • No one cares what industry your reps are in... you just need to have reps. If you're a VP they might care, but not as an associate or an analyst
  • Jump for a better brand, platform, dealflow, etc. You're going to make money. At a decent MM shop you'd make well more than what you're making now.

Props for raising a fam while being an analyst. That's rough.

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Dec 12, 2018

...y'all hiring?

Dec 13, 2018

I have the same problem. I have been with a 6 man boutique firm and has seen people come and go. The work setup is pretty cool though, the guys I work with are all good people.

I won't lie to you but as youngins in the industry we have to be very conscience of the fact that its all about the money. You work for money and are motivated by how tough conditions generate the best work and quality through monetary incentives. The relationship exists becoz of money (i.e. you need money and offer your services for it & they need your skills and are thus paying you for them). Economics has a nice explanation for where the best talent goes and what the best incomes can afford. It is clear you are trying to maximise your utility and indeed you should especially since your industry peers who are also your equals are earning better than you are considerably.

FOMO is a real thing and it exists in us Gen Y & Millennials more than ever. Time is also a factor and so you need to focus on aiming for a good basic salary (it is the gift that keeps giving). With that being said, your bonus, increment and other remuneration policies are based on it. Either it be your next move/renegotiating your current salary with the 5 man M&A boutique, you need to be very specific on your basic salary and the quantum of it. 8 months for most is a short time for one to have paid dues and demand a sensible salary, lets face it your still new.

I would also recommend though, before making changes too soon, that you should have these conversations with your employers. Be honest about these things and realise that they are also people and make rational decisions just like me and you. Give them the satisfaction of you having informed them and them having not done anything about it.

Corp. Fin. Analyst currently working two finance jobs (and a teaching gig and trying to save my music production solo career). I love avocado's. And yes Cape Town is the most beautiful place in the world. Don't believe me, come thru and find out.

Dec 12, 2018

8 months is a very short period but at the same time, analysts have the power to lateral after 6 months of full-time experience. The market is hot and many banks consider 6 months of full-time experience transferable.

If a small shop isn't paying an analyst market rate and he can't pay his bills, they shouldn't be surprised if he leaves. I understand that there is a lot of pressure for MDs to keep OH low but they would probably be better served in the long-run if they didn't have to keep on retraining new analysts because their older analysts jumped shipped for higher comp opportunities.

Dec 9, 2018

I'd firstly like to thank everyone for their meanigful insight; I was afraid of being percieved as greedy or selfish (hence the burner account) but I'm glad people are seeing it from my perspective, and not seeing me as an entitled shit.

Like I said in my OP, I'm currently 8 months in, but have started moves to make the jump around February next year. Moving now is not going to happen; EOY slows recruitment down and as many people have said above, positions are bound to open up once bonuses are paid out (around Feb). So by the time I move, I would have been at this shop 10-11 months. While not ideal, I really don't want to be here longer than I have to, due to the potential solvency issues and the erratic CEO who is running this shop, and its reputation in the market, to the ground.

I've started reaching out to my network and so far it's looking promising. Friend at a lower BB in research said she would reach out to me once positions open up next year, and has taken down my details. She's very high up so, although it isn't M&A, it's still something. Have also reached out and had coffee chats with some MDs at MM firms. No positions available atm but will keep me in mind once there's availability.

Not sure what else I should be doing from my end. I'm brushing up on technicals in anticipation for interviews because I haven't done that much modelling at this shop. I'll continue to reach out to people and maybe I'll get lucky soon. Apart from that, not much else to do.

I'm hoping my work experience is enough to cover the glaring gaps in my CV (mainly my GPA), but as above psoters noted, i might be able to swing it.

Thanks again guys. Will continue to provide updates as they arise. I'm a regular psoter on my ordinary account and I can't stress how much WSO helps me.

Dec 12, 2018

Its not selfish if you're being paid below market and you don't like the current direction of your firm. Its a free country and its funny how green workers are (especially at the entry-level) about jumping ship and being perceived as greedy.

I knew of two people that worked at the same firm in BO with two completely polar opposite mindsets on this: one that jumped ship three times within two years to make incremental progress in order to make it to his goal of a dream job in banking and the other that stayed within the same role in hopes that all his hard work will be rewarded by superiors. You know who ended up getting reaching his goal first? The guy who ended up putting his own interests first and didn't care what others thought of his career moves.

So whether you want to either work in a different role, increase your salary, be promoted, etc., you can't put your faith in management to drastically improve your working situation.

Dec 13, 2018

Gives this man a Bells!!!

Corp. Fin. Analyst currently working two finance jobs (and a teaching gig and trying to save my music production solo career). I love avocado's. And yes Cape Town is the most beautiful place in the world. Don't believe me, come thru and find out.

Dec 16, 2018

1) Quit your job and sell everything
2) Invest it all into Bitcoin
3) ????
4) Profit

If the glove don't fit, you must acquit!

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