Investment Banker Salary + Bonus:
- Analyst - First Year: $70,000 - $150,000
- Analyst - Third Year: $120,000 - $350,000
- Associate - First Year: $150,000 - $350,000
- Associate - Third Year: $250,000 - $500,000
- Vice President: $350,000 - $1,500,000
- Managing Director/Partner: $500,000 - $20,000,000+
Yes, it's true, monkeys love that hold card cash (and silver bananas). These figures are an approximation based on the user submissions on Wall Street Oasis (over 86,000), as well as the thousands of discussions on compensation in the community archives. Below is a sample table of investment banker salaries and bonuses from the WSO Investment Banking Industry Report (updated daily). If you contribute to the WSO Company Database, you can get access to thousands of detailed compensation statistics across thousands of investment banks without paying a dime. Yes, fellow primates, we love you too!
Bonuses for Investment Bankers by Position
Please note that the figures listed above are approximations and should be taken with a large banana peel. Investment banking compensation at various levels of seniority (in this case pulled from the WSO Investment Banking Industry Report with over 80,000 submissions) can vary widely firm by firm and year by year. This is especially the case for the volatile investment banker bonus. In bad recessions, some banks have even been known to pay out a $0 bonus (oh, the horror!) -- this is sometimes affectionately called "a donut". From analysts to managing directors, the pay is traditionally heavily weighted toward the bonus portion of the compensation, which is part of the reason for such long hours. How else do you think investment banks keep us primates grinding in our cubicles until 4:00am and attached to our phone 24/7? Obviously, these comp figures can vary significantly depending on the firm, division and region, so if you are looking for more detailed or firm-specific salary and bonus data, you should check out the WSO Company Database which has thousands of detailed submissions. Within each company salary page, you can filter by position, city, group/division and you can even slice and dice the compensation by averages, medians, sexes and race on the industry reports.
- At the analyst level, it is not uncommon to work between 70 to 100 hour weeks at some of the more demanding firms. Most analysts start in the summer and receive their first investment banking analyst bonus around June or July, approximately one year after they start working.
- At the associate level, the hours are usually still long, however, traditionally 10-20% less than that of analysts. Some associates are internal promotes, but the majority have attained an MBA. Associates also receive a sign-on bonus, traditionally from $10,000 to $30,000, and a stub bonus.
- The salary and bonus for Vice Presidents and Managing Directors in investment banking has a much higher variance but is usually much more of a function of the firm's performance. At the more senior levels, pay is based more off of individual revenue-generating performance.
Investment Banking Salary at Different Firms
In our salary database, we have compiled a list of the banks that pay the best. Remember, these firms are all ranked based on thousands of Company Database submissions. Click below to access.
Investment Banking Salary Progression - Analyst to MD
WSO User @Sil" nicely sums up how bonuses differ based on position in investment banking:
- No investment banking analyst will get a bonus equal to multiples of his base salary. Typically an IB analyst bonus is between 30-100% of base.
- As you move up the ladder, the percentage of your all-in comp that is paid out as a discretionary bonus increases because you move from an analytical employee (ie processing the work like a monkey analyst) to one who brings revenue into the bank (bringing in the clients like a King Kong Managing Director)...and you are paid accordingly.
Investment Banking Associate Compensation
For post-MBA associates, all-in compensation varies a good deal with signing bonus, relocation bonus and stub bonus. For base salary, you can expect between $125,000-$150,000. Bonuses are anywhere in the range between $80,000-$200,000. All-in, you can expect anywhere from $200,000-$500,000 with some outliers on both sides and depending on whether you are a 1st-year associate or a more seasoned veteran of the jungle.
Investment Banker Earnings vs. Private Equity Salary
There's a lot more variability with private equity salaries because the pay structure is quite different from investment banking. Here's a nice summary of which pays more and what variables determine that by WSO User "Draper_LDN".
- Depends on the level you are in Investment Banking vs when you enter private equity. If you joined as a previous associate, your salary, bonus, and carry will be higher.
- The bonus portion of pay at PE firms tends to be slightly less as a percentage of overall comp when comparing PE associates to IB associates. A big part of the bonus is often used for deal carry payments (depending on Fund). The significant potential payment in private equity comes in the form of a carry pay-out, which can take many years all depending on timing, fund structure, employment contract terms, etc. Learn more about private equity carry here.
- With PE, you are slightly more committed to the fund as you have to stay with the firm until the carry payments are being paid out. A managing director in investment banking could get an annual bonus of $250,000-$1m+, whereas, in PE at a fund that is performing well, you could pull $1.0m-5.0m+ in carry payments each year at the senior level.
- All in all - you will get rich either way. It all depends on what you like to do! Buy-side or sell-side...investing or advising.
IB Salary in New York vs. Other Cities (LA, SF, Chicago)
One question that we get a lot is whether salaries in investment banking vary depending on where you work. The short is answer is no at the larger banks, however, salaries can vary geographically if we are referring to smaller middle-market or boutique IBs. Here's some notes from @Gbanker74160", who goes into why the pay is similar geographically due to known exit opportunities being better in higher COL cities. "That isn't to say that there aren't strong long-term career benefits to working in NY IB. Namely, there are a ton of financial opportunities in the metro area. In other places, the financial community is smaller and exit/lateral ops might be harder to find. This isn't a huge issue in large cities (SF, LA, Chicago, Dallas/Houston, Boston). But if you're in, say, Charlotte, Atlanta, or Denver, then there's definitely a sizable drop and your prestige point holds true. You can move from NY IB to a HF outside NY. That said, there aren't too many HFs outside NY, relatively speaking, and moving across coasts can be challenging. And being at a NY IB wouldn't specifically help you with this and would probably hurt you compared to someone at a leading group already in the HF's location. So if you want to end up at Oak Tree, Ares, Value Act, Farralon, or what have you, you might be better off starting on the west coast, and the same goes for funds in TX."
Investment Banking Pay vs. Consulting Salary
Investment banking pays more than consulting, but that's to be expected with longer work week on average (although some might argue that our consulting primates have it just as bad with all of the travel). In general, management consultants out of undergrad typically earn $75,000-$90,000 all-in. Top firms, like McKinsey, Bain, and BCG, pay around $100,000. You can certainly, expect to make more money in investment banking, but you also typically sacrifice lifestyle for that bump in pay.
Banker Average Hourly Wage
Let's do some quick math. Let's say a top investment banking analyst at a bulge bracket investment bank works on average 80 hours/week over 52 weeks and is paid $130,000 all-in. This would imply an hourly wage of $31.25. Using those numbers as a rough guideline, the typical junior investment banker makes between $25 - $35 per hour (pre-tax).
M&A Salary and Top IB Group Comp
Obviously now that we've enlightened you it's clear that investment banking is a well-compensated field. There are few jobs that pay six figures to college graduates right out of school. It's important to note that when looking at these average banker salaries, some of the top groups like M&A and top industry groups at the elite investment banks (like TMT at Goldman Sachs) pay even more than these average comp figures we're quoting. This is true especially in the higher cost of living cities like New York and London. That said, the real money is at the top. Even if you find investment banking isn't for you long term, enduring an analyst or associate stint can teach you an incredible financial skillset, build a great network, and open doors to incredible exit opportunities into other attractive career tracks.
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Interested in Investment Banking - Breaking In
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Sample Compensation Distribution in WSO Company Database Shown Below (for HSBC)