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Comments (68)

Aug 4, 2021 - 4:10pm

Trust me, I've complained several times to upper management and more loudly to my fellow junior analysts. Mgmt said it was being considered in June. Still holding out hope for a larger than usual raise come bonus time, but I'm beginning to lose hope.

Aug 4, 2021 - 7:23pm

Why? Record profits in markets, IB, and credit losses best they've been in 20+ years. Why should I be happy there aren't salary reductions when business is better than ever? 

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Aug 4, 2021 - 10:17pm

Sure, but here is how a bank's senior executive views equity research:

Revenue: $0

Cost: salary + bonus + other opex

Profit: negative of (salary + bonus + other opex)

Hence, be glad they are reducing salary / laying off, or forcing the same headcount to cover more stocks, or shutting down the department altogether. 

Instagram: @dickthesellsider | Substack:

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Aug 8, 2021 - 10:56pm


Why? Record profits in markets, IB, and credit losses best they've been in 20+ years. Why should I be happy there aren't salary reductions when business is better than ever? 

Because ER is not markets or IB. It's a cost center like the India office that fixes your iPhone when it's got a glitch. It will be automated soon. 

Aug 13, 2021 - 2:25am

Equity research is considered like credit, the red headed step child. Your base adjustments will always lag IB and your bonuses will never catch up.Think about it this way, IB brings in revenue and many times that success is incumbent on the relationships the bankers have with clients.Equity research is something anyone can do, you don't need a relationship with companies. And you don't bring in any revenue. Similar story to credit, which is probably even more useless considering every bank I've worked at never turns down a deal lol.

EDIT: man the research guys don't like the cold hard truth lol.

Aug 13, 2021 - 1:14pm

Yikes. Clearly you know literally nothing about ER whatsoever as the other poster said. I'm not even on the sell side anymore yet I feel compelled to defend it from rampant misinformation like this. 

Yeah, pay is lower than IB, but it's still pretty damn high for a young professional and you don't get treated like a slave (which is the impression I get from IB) AND the work is actually interesting / challenging even at the most junior levels. If we were expected to work 80-100 hrs a week, the pay gap would be narrower. Why would banks keep supporting and investing in their research franchises if they added no value, served no purpose, or could be replaced by 'anybody' cheaper? Think about that…banks try to maximize profit like any other company. 

Relationships (with the companies, investors & KOLs) are also absolutely critical if you're on a good team as well. Also, research does generate revenue, both directly (fees) and indirectly (trading), albeit less than IB and at lower margins. The reason this still works is because research also generates synergies with other business units like IB, wealth management, trading, etc. that help those business make more money. Note that not every bank does this the same way so I am generalizing to an extent. 

Aug 13, 2021 - 2:17pm

I know I come off as harsh sometimes, but it's a forum not a dinner party so why try to be polite instead of telling the harsh truth.

Equity research is where people who couldn't get into banking go or people who want to eventually move into banking but can't get in at first.

Equity research is like a nice to have, there is a reason the pay sucks. Is it a good job compared to regular jobs? Sure, but we are talking about elite places on this forum. Don't try to justify the low pay, just be honest man.

The OP asked my ER pay is lagging. It's cause you don't pay the second tier people, that's why.

It's like saying duke isn't that good a school. It's better than most, but it's no Ivy League. Keep it real man.

  • Research Associate in ER
Aug 13, 2021 - 2:57pm

Agree to disagree, but your comments come off extremely insecure rather than harsh. It's one thing to point out differences in function and another thing to get into a dick measuring contest about prestige and tiers when nobody asked. I hope you don't tie your entire life's self-worth on things like this, but then again it's WSO, so can't expect much. Cheers.

Aug 13, 2021 - 3:13pm

I'm keeping it real in case a young person reads this and is considering research vs banking and thinks research isn't that bad after reading this. I don't understand what I am saying that is so controversial. The OP asked my ER isn't getting bumps and I said because its not a very vital function. I don't understand how that rankles people. The banks or any company pays the jobs it values the most. That's why surgeons are typically paid more than general practitioners right? IB is paid better than ER because the job is tougher and requires more talent. The pay reflects this.

I had a short stint in credit, and I am telling you the people I worked with were not as bright or motivated. Hence, the lower pay. Also, there is a plethora of equity research reports out there, plus rating agency reports, etc so the work literally is fungible.

Again, all I said was ER bases lag because its not a sexy or high powered sector in a bank. I don't understand how this bothers so many people.

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  • Research Associate in ER
Aug 13, 2021 - 3:35pm

Thanks for elaborating on your stance. I don't think anyone would disagree with you in saying IB generates more direct revenue than ER. That said, it's another thing to make a blanket statement that people in ER aren't as "talented" as those in IB and can be easily replaced - I think it's this mindset that irks most people here. I fundamentally disagree with you on this point, and think it's terribly misleading for you to say that with the amount of young people coming here for career advice. I really don't see how an IB associate is any less replaceable than an ER associate, since most of junior IB work is just modelling/ppt. Top ER analysts also have better industry knowledge than IB MDs, and I've seen them shift to senior IB roles easily.

Personally, I chose ER because I find it more intellectually stimulating, and have plenty of friends in IB BB/buy-side. I don't see a difference in talent or intelligence, and my exit ops look just as cheery. Again, the caveat is to pick a 'hot' sector rather than a dying one, and work for a good analyst.

And to your analogy, just because someone is a surgeon doesn't mean they are more talented than general practitioners - most of the times it's a personal choice. I think I can say with confidence because I'm one of those ex-medical professionals who went into finance.

  • Intern in HF - EquityHedge
Aug 13, 2021 - 2:58pm

Dont think anyone here cares or is hurt from your "harsh tone". Your characterization of the job is just wholly incorrect and definitely shows you have some insecurities. Most people going to research likely arent considering IB anyways, and most exits from research are directly to the buyside or staying within research - Not IB.

Look, if you have the need to feel superior to others, dont know why you havent exited to a position that provides way more interesting work and skin in the game - then you could look down on bankers too. Sellsiders might not be value adds, but bankers seldom are either - much more show than substance.

  • Research Associate in ER
Aug 13, 2021 - 12:05pm

I say this is more sector dependent. If we're using pay as a benchmark on value add, just look at how much biotech/HC analysts are getting paid.

For the record, as an associate, I'm getting the same base as IB associates at my bank, but that's because of the sector I'm in and related experiences. To each their own.

  • Intern in IB - Gen
Aug 13, 2021 - 1:16pm

Love to see it. Hopefully some of the small shops/boutiques follow suit (though not necessarily likely, no idea what theyre thinking rn)

Aug 13, 2021 - 1:28pm

The number of people saying ER brings in no revenue just shows how little people actually know about ER. Basically every ER dept in a major US bank brings in revenue under MiFID-II lol. And in the sell-side, ER also gets paid by IB for every IPO ER is staffed on.

Aug 13, 2021 - 2:20pm

While ER compensation cannot be tied to specific deals, analyst bonuses can be based on 'broad value add to firm' which includes involvement in deals. This is how they get paid for being tied to deals without stating it explicitly, and is one of the reasons sectors like biotech get paid more (ie lots of deal activity to support them). At many banks, ER does play an important role to the overall service to corporate clients (including simply providing coverage for the issuer, which is important). 

Not sure what is with the vendetta against ER from some users on here who know nothing about it, but it's very strange. 

  • Intern in IB - Gen
Aug 15, 2021 - 6:26pm

The only reason that ER will lag IB is because you work less hours.

Until you reach the MD/VP levels (which 1% of analysts do anyway in IB or ER), you could say both are a cost center. I don't know how you could disagree on the fact that MDs in ER add value. Most of them are on CNBC all the time, constantly interacting with buyside clients, and providing valuable research to bankers for their firm's own deals.

The only difference is that junior IB analysts work 40% more so their bonus will account for that. People have been saying for the past 20 years that ER will fade away - yet all the automation and S&T job cuts we haven't seen any major bank cut ER (Nomura doesn't count since they just acquired Wolfe and dropped their own brand - offsets).

For what it's worth, my salary in ER as a junior analyst is the EXACT same as IB.

Aug 24, 2021 - 10:04pm

Comp definitely going up across the board at most firms (not by any amount worth crying over at the junior level) that aren't already doomed. But a word of wisdom to those seeing the golden goose (ridiculous bids from competing firms) being dangled in front of them - make sure you choose the right ship to jump to... it's almost inevitable that this boom period in comp/hiring is temporary and will result in headcount/bonus cuts in a a couple of years at a significant number of shops once the pipeline dries up.

  • Analyst 1 in ER
Sep 4, 2021 - 10:13pm

Correct me if I am wrong, but isn't BoA raising to $100k only a rumor so far? I know there was news on it but nothing official

Sep 6, 2021 - 4:48pm

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  • Prospect in ER
Sep 11, 2021 - 4:17pm

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