will covid-19 affect IB bonuses?

Analyst 1 in IB - Ind

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

Comments (89)

Mar 16, 2020

Yes.

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Jun 10, 2020

Agreed!

Mar 16, 2020

Less activity -> less fees -> lower bonus pool -> lower bonus

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Funniest
  • Associate 3 in IB - Gen
Mar 16, 2020

No, all economic activity is grinding to a halt but you should expect bonuses to be awesome.

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  • Intern in S&T - Other
Mar 16, 2020

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.

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Mar 17, 2020

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
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.

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  • Analyst 2 in IB-M&A
Mar 17, 2020

Lol more like 0% bonus if its as bad as last recession

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Mar 17, 2020

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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Mar 17, 2020

Thanks for the reply. Hindsight might be 20/20 but now you can always pitch 'I was the only analyst in my class that survived 2009'

Mar 17, 2020

Absolutely

Mar 17, 2020

Oh hell! Absolutely yes!

Quant is life.

Mar 17, 2020

On an associate and above level, yes. Analyst bonuses will definitely get impacted but not as drastic, especially since most BB pay their bonuses in July/August for analysts.

Most Helpful
Mar 17, 2020

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

"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."

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Mar 17, 2020

Well, well, very eloquent for a man named after a Bond girl.

Mar 17, 2020

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

The 1) mortgage refi, and 2) banks will take care of themselves before they take care of you resonated highly! I like the MAC clause - although I think this easily falls under an "Act of God" (dealt with a deal on that clause when 9/11 happened) - you see some crazy stuff in finance!

Mar 17, 2020

This is the only time where a zero bonus isn't a "fuck you" bonus

Mar 17, 2020

Does anyone know how Restructuring groups are typically impacted? Are bonuses normally stable or hit in line with the overall firm?

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  • Intern in IB-M&A
Mar 17, 2020

Also curious

Mar 17, 2020

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.

  • PM in HF - Macro
Mar 18, 2020

.

Mar 18, 2020

You don't

Mar 19, 2020

That's what was done with a not insignificant portion of the 2009 bailout money...oh well

Mar 18, 2020

I hear as as all economic activity is grinding to a halt we get double

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Mar 18, 2020

2020 comp will obviously be impacted, but everyone is also missing the fact that the deferred portion from prior years is now also worth ~40% less. It's a brutal time to be a banker.

  • Analyst 1 in IB-M&A
Mar 18, 2020

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 18, 2020

Yes. You could be laid off.

Mar 19, 2020

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.

  • Analyst 1 in IB-M&A
Mar 19, 2020

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

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

Mar 18, 2020

I think it's cute that kids think they're getting a bonus. This is going to be worse than the GFC

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  • Associate 3 in IB - Gen
Mar 19, 2020

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

Interesting. Do you expect to receive one as an associate?

Mar 19, 2020

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.

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  • Analyst 1 in IB - Gen
Mar 19, 2020

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.

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Mar 19, 2020
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-vir...)
If we realize this scenario, keeping your job is a blessing.

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Mar 19, 2020
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-vir...)
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.

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Mar 19, 2020
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?

Mar 19, 2020

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.

Array

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Mar 19, 2020

Also, let's stop comparing this to 2008 when the banks were literally begging the government for money to stay solvent. That's not happening. They banks have clean balance sheets and will pay analysts because they care about their long term reputation and ability to attract & retain talent.

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Mar 19, 2020
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.

Mar 20, 2020

When you have every other industry asking for a bailout, banks by definition will have to do the same

Mar 19, 2020

A) Not junior comp. The deal is that it's performance based. Seniors, I agree with you.

B) Why would banks trim headcount because of a single down quarter or maybe two?

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Mar 19, 2020

^ This is his first downturn.

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Mar 19, 2020
banker832:

a single down quarter or maybe two?

Where do you think we are?

Mar 20, 2020

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

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 20, 2020

There will continue to be flare-ups in the U.S. throughout the year

Mar 22, 2020

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.

Mar 23, 2020

Hundreds of millions of people will die in what will be the worst natural disaster in human history. Your bonus will be the same as before though, do not worry.

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Mar 23, 2020

hundreds of millions? easy there buddy. not even close to any estimates

Mar 23, 2020

I was exaggerating, though I do think the death toll will be extremely high.

Mar 24, 2020

hahahahhahaha hundreds of millions??? Is that you Joe Biden????

For reference ~3.5 hundred million people live in the United States .. with that sort of intuition for numbers, good luck in this industry bud :P

Mar 25, 2020

Thoughts on a bonus being paid out in April? It's a real kicker to have a FYE in March when this thing only started to be impactful the last two weeks...

May 31, 2020

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.

Jun 1, 2020

do you think this will be the case for S&T and DCM? both of these groups in my bank are already close to meeting their 2020 budget

Jun 1, 2020

Yes, they'll be lower. Will depend on individual performance and how prepared the bank was financially to weather the crisis. Many have been expecting a pullback for years.

Jun 10, 2020
  • Summer Associate in IB - Gen
Jun 10, 2020

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.

Aug 1, 2020

Just wanted to circle back on this thread 4 months later because I'm a petty little bitch to say that I was right and all of you were wrong and my bonus was not impacted by COVID :)

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  • Analyst 1 in IB - Gen
Aug 1, 2020

What bank?

Aug 1, 2020

A bulge bracket. Top bucket second year analysts made 190k :P

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  • Analyst 1 in IB - Ind
Aug 2, 2020

Same at my BB bonus compensation did not seem to be impacted not sure why there are so many rumors about $0 bonus, maybe for smaller firms or DB/CS/UBS?

Aug 2, 2020
Comment
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Aug 2, 2020
  • Analyst 1 in IB - Ind
Aug 2, 2020