will covid-19 affect IB bonuses?

what do you think will happen? anyone who lived through any disasters can share their experience? thanks

Comments (89)

 
  • Intern in S&T - Other
Mar 16, 2020 - 2:34pm

No disrespect intended, but you managed to get a FT job in IB, and you're seriously asking if a global economic, political, and social shutdown, that is likely to last at least a few months, will affect bonuses? Pretty sure the degenerates at my fraternity could even answer this question.

 
Mar 17, 2020 - 4:18am

It will most likely be similar to my experience in 09' to 10', if you're well ranked on your team, you will receive a bonus and that bonus will be - congrats you get to keep your job. Buckle up kiddo, the world needs ditch diggers too

I come here when I'm bored....
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Mar 17, 2020 - 12:36pm

RacoonFood:

It will most likely be similar to my experience in 09' to 10', if you're well ranked on your team, you will receive a bonus and that bonus will be - congrats you get to keep your job. Buckle up kiddo, the world needs ditch diggers too

Out of curiosity, how much of a hit did you see (assuming you're a high performer)? 50%? That's kind of what I expect because the situation in Q4 should look less dire and there should be some pent up demand that flows through.

 
Mar 17, 2020 - 12:51pm

How much of a hit did my annual bonus take in2009? Haha.

There was no hit, because I didn't get a bonus. 2009 I was a second year M&A analyst at a larger boutique firm. Fee revenue was extremely down and layoffs weren't enough to lower op expenses. I got lucky as the team I mainly supported had a niche in manufacturing with a couple guys coming from restructuring, which they were able to position us as distressed M&A bankers to the firm for them to keep the junior banker execution support. My bonus was keeping my job, it wasn't fiscal. It was the best prospects at the time as I saw so many people packing up their shit and walking out into the unknown. Hindsight is 20/20, I stayed in banking, going on 10+ years, and some of my closest friends from my analyst class did very well in tech and other start ups.

I come here when I'm bored....
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Most Helpful
Mar 17, 2020 - 5:19pm

Old person here. Finance is very fickle this way. In good years, you're paid above average, and in bad years, companies retrench. They are skittish, they have PTSD. I don't have a crystal ball, and every firm is different, and I'm not the Oracle at Delphi. But if you get anything, be happy. If you get to keep your job, be happy. If you don't see any tragedies personally, in your family and group of friends, be happy. After 2007, so many lost not just jobs, but the ability to find a job, for years, sometimes at all (some areas were literally obliterated). I know you're young, and you fought for your job, and this all sucks, and you've been reading about the high high bonus numbers that very young people earned just this quarter. But realize you chose a field that has a lot of risk, even in relatively good times. It works both ways.

 
Mar 17, 2020 - 6:25pm

"The observation of the numerous misfortunes that attend all conditions forbids us to grow insolent upon our present enjoyments, or to admire a man's happiness that may yet, in course of time, suffer change. For the uncertain future has yet to come, with all variety of future; and him only to whom the divinity has [guaranteed] continued happiness until the end we may call happy."

 
Mar 17, 2020 - 8:28pm

Shaynepunim - very well said and I hope all will take it to heart. This field is a roller coaster of emotions experienced at short term intervals. One must stay grounded in order to get through it. I salute you.

I count myself lucky to have experienced the last recession, which made me be conservative with my personal finances. No one knows what will happen 2020, but I can see the trend towards banks making those "tough" decisions. One of the most important lessons I've learnt, which is a hard pill to sallow, is firms will take care of themselves first before they take care of you. Talking to friends in the industry at other IBs, PE and law firms, the consensus is deals are either being delayed or falling apart. (Shit, a lawyer friend told me that the seller accepted a corona virus MAC clause inserted by the buyer just to get the deal done).

2020 will be a tough bonus year. But, just have to grind through it and hope that your personal balance sheet ready for a potential short term beating. On the positive side, I'm really look forward to refinancing my mortgage this year.

I come here when I'm bored....
 
Mar 17, 2020 - 11:56pm

Probably

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
 
  • Analyst 1 in IB-M&A
Mar 18, 2020 - 12:49pm

So...what you're telling me is that I will not be able to make a dent into my $200K of student loans I took out in order to go to a top Target with my (non-existent) bonus this year after working 80-100 hours a week up until now? If I'm an August bonus cycle and the firm has performed well up until now would I really get Zero bonus?

 
Mar 19, 2020 - 12:42pm

Not trying to pile on - really I'm not. And apologies if you already know this and were justifiably letting off steam.

You should expect a $0 bonus and that'd be more than fair. It may not be what you feel you deserve based on your efforts, but that's not how life or business works. You accepted an offer where you knew a huge portion of your compensation was contingent on factors you could control and factors you couldn't. You took a risk. It was a smart risk and a good decision at the time based on what you knew. It just doesn't look likely that it'll work out how you hoped anymore. Sorry dude. If a $0 bonus is the worst thing that happens to your career from all of this, you probably can count yourself lucky.

My guess: five years from now you won't regret the path you chose, even if you're compensated way below what you expected at the outset.

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  • Analyst 1 in IB-M&A
Mar 19, 2020 - 12:55pm

Damn, thanks for the brutal honesty. I was letting off some steam for sure, but starting to accept this is the reality. I knew what I was signing up for (father is in IB and survived '08/'09), but I am second-guessing my risk calculations for taking the student loans out for a target vs. busting my ass of networking from a cheaper school.

 
Mar 18, 2020 - 1:21pm

My bank paid out bonuses for year end in February (even for 1st year analysts). Expecting 2020 bonuses to be below average as Q1 and Q2 are guaranteed to be terrible this year across the economy. That said, the sentiment for bonuses is that analysts usually stay in the same range with the senior guys eating the blow (or upside) the most. Think bonuses for 2019 and 2020 should be fine assuming we don't see an environment similar to 08

"The future will be better tomorrow" -Dan Quayle

 
  • Associate 3 in IB - Gen
Mar 19, 2020 - 11:51am

really - well let's see how this plays out. bonuses are in a few months for analysts (I am not one) and I'm rather sure they'll get something rather than nothing.

 
Mar 19, 2020 - 4:34am

pretty sure at this point in time you should be fighting to hold onto your job; bonus is secondary and doesn't matter in the long run.

Array
 
  • Analyst 1 in IB - Gen
Mar 19, 2020 - 10:39am

I really don't think bonuses for analysts at JPM, Goldman, MS, BofA, Citi, Evercore, PJT etc. are going to be impacted much if at all.. why would they be? This is such an insignificant amount of money for firms with 50bn+ in revenue and these banks need to retain juniors..

People on this forum make it seem like banking is so elite and analysts should be sooo grateful to simply have their jobs, but at least in my group it's very much the opposite. We're desperate for decent junior bankers and a good A2A is so much better than an MBA associate... and even a decent MBA associate is hard to find. It's really hard to get anyone from HBS or GSB to accept an offer because they can do any number of jobs that pay about as much and don't suck the life out of you... I think at most analyst and associate bonuses will be impacted ~10-30% max.

 
Controversial
Mar 19, 2020 - 11:54am

Analyst 1 in IB - Gen:

I really don't think bonuses for analysts at JPM, Goldman, MS, BofA, Citi, Evercore, PJT etc. are going to be impacted much if at all.. why would they be? This is such an insignificant amount of money for firms with 50bn+ in revenue and these banks need to retain juniors..

People on this forum make it seem like banking is so elite and analysts should be sooo grateful to simply have their jobs, but at least in my group it's very much the opposite. We're desperate for decent junior bankers and a good A2A is so much better than an MBA associate... and even a decent MBA associate is hard to find. It's really hard to get anyone from HBS or GSB to accept an offer because they can do any number of jobs that pay about as much and don't suck the life out of you... I think at most analyst and associate bonuses will be impacted ~10-30% max.

This is just wrong bro.

This is shaping up to be far worse than the 2008 GFC.

Some projections have us hitting 20% unemployment. If this drags on into late summer, currently 80 million US jobs are flagged as 'moderate' or 'high' risk (https://www.wraltechwire.com/2020/03/17/report-virus-puts-millions-of-j…)

If we realize this scenario, keeping your job is a blessing.

 
Mar 19, 2020 - 1:13pm

amonkey_1:

Analyst 1 in IB - Gen:

I really don't think bonuses for analysts at JPM, Goldman, MS, BofA, Citi, Evercore, PJT etc. are going to be impacted much if at all.. why would they be? This is such an insignificant amount of money for firms with 50bn+ in revenue and these banks need to retain juniors..

People on this forum make it seem like banking is so elite and analysts should be sooo grateful to simply have their jobs, but at least in my group it's very much the opposite. We're desperate for decent junior bankers and a good A2A is so much better than an MBA associate... and even a decent MBA associate is hard to find. It's really hard to get anyone from HBS or GSB to accept an offer because they can do any number of jobs that pay about as much and don't suck the life out of you... I think at most analyst and associate bonuses will be impacted ~10-30% max.

This is just wrong bro.

This is shaping up to be far worse than the 2008 GFC.

Some projections have us hitting 20% unemployment. If this drags on into late summer, currently 80 million US jobs are flagged as 'moderate' or 'high' risk (https://www.wraltechwire.com/2020/03/17/report-virus-puts-millions-of-j…)

If we realize this scenario, keeping your job is a blessing.

hahah give me a break with this North Carolina tabloid "economist" garbage.. The fact is nobody knows what the Country will look like in 6 months, but I can promise you once the outbreak is over (which will be 1-3 months / no cases reported in China today) we will not be at 20% unemployment. 20% is a "during the outbreak" figure when we literally don't leave out homes.

 
Mar 19, 2020 - 12:54pm

Analyst 1 in IB - Gen:

This is such an insignificant amount of money for firms with 50bn+ in revenue and these banks need to retain juniors..

The significance or insignificance of the money is irrelevant, in the same way that you could easily afford to pay $10 for a can of Coke, but you won't if you don't have to.

But you're right on about retention. If management thinks there are other opportunities out there and they're at risk of losing analysts (assuming they even want to keep them in a low deal-flow environment), they'll pay out. If unemployment goes up and other banks are trimming headcount and/or doing hiring freezes, then why would they pay to keep someone who isn't in demand?

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Mar 19, 2020 - 12:57pm

We laid of analysts 2 days before they were going to get their first full-year bonus back in 2009-2011. In a crisis, all bets are off and anyone thinking that bonuses are not going to be impacted is simply delusional.

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Mar 19, 2020 - 1:56pm

banker832:

they care about their long term reputation

The long term reputation of top banks has always been: your bonuses will be great if we do great, and they will suffer if we suffer. This would only serve to remind people who forgot about the latter half of that bargain.

banker832:

they care about their ability to attract & retain talent

If headcounts are being trimmed across Wall Street, then you don't need to pay bonuses to retain talent. Where else are they going to go? And if an analyst leaves, there are 100s more talented people who just got laid off and are desperate for work.

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Mar 20, 2020 - 8:52am

Tell me if I am wrong. It literately just takes two weeks of extreme social distancing to stop the spread of virus. But this requires the forced participation of EVERYBODY. From outbreak to zero new cases, China contained the disease in less than two month. Aren't we better than China in every way? Then we'll be fine in April!

I just hope the President as well as the teenagers currently having fun in Miami can all behavior like rational individual and take proper and extreme measures to stop the disease. We can do it. We just need a leader who has the courage to do something.

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  • Incoming Analyst in Consulting
Mar 20, 2020 - 9:19am

We haven't seen it through in China, there are new cases and they are not reporting it. If only we don't have the second outbreak.

 
Mar 22, 2020 - 4:47pm

This is dead wrong; the US hasn't (and probably won't) mandate any lockdowns on the scale that China did. Also, assuming all the numbers China provides are veracious, you still have to consider that China got their lockdown under control through various ... means, from an early stage. Most Americans still don't even realize the severity of the virus.

 
May 31, 2020 - 3:59pm

Expect all of you group heads to say you did a great job and deserve a higher pay but due to overall group performance and the covid situation, they will have to only provide $10-20K to you as a second year analyst...nothing you can do about it.

You should quit now if you're expecting a large bonus. It's not going to happen. Please explain if you think it will happen.

Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.
 
  • Summer Associate in IB - Gen
Jun 10, 2020 - 10:07am

nope. still expecting my full bonus number. only caviot, I'm expecting that number to be Zimbabwean dollars. so hoping I can afford a Snapple can with it.

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