Saturday, May 2, 2009

How Much Do Investment Bankers Make?

During the history of this blog we have never discussed investment banking salaries in detail. We have alluded to the fact that bankers are well compensated but how well?

There is no easy formula for determining banker compensation. At the analyst and associate level, for whom this blog is targeted, compensation is relatively similar across the board. Boutiques and bulge bracket investment banks pay their analysts and associates similarly; variations exist but compensation figures end up in the same ballpark. The largest discrepancies in compensation stem from the difference in bonuses which are derived from the combination of firm performance, group performance, and personal performance.

Banker compensation is down from its heights of a few years ago. Most young bankers understand that banking at the analyst level is not about compensation, rather its about establishing a career trajectory. There are other jobs for maximizing wage per hour.

The table below is a fair representation of banker compensation at different levels of seniority.

Salaries in Investment Banking (with bonus)

Job Level Salary Range Typical Comp Prerequisite
1st Year Analyst $60K - 150K $90K Bachelor's
3rd Year Analyst $120K - 300K $150K Bachelor's
1st Year Associate $150K - 250K $170K MBA
3rd Year Associate
$250K - 450K $300K MBA
Vice President $350K - 1MM $500K 3-6 years
Director / Principal $400K - 1.5MM $700K 5-10 years
Managing Director $500K - 20MM $800K 7-10 years
Department head $800K - 70MM $2MM 10+ years


Demystifying your MD's compensation is next to impossible but he (or she) rakes in on average a couple million bucks per year. Not a bad salary for a 9-5 job.

9 comments:

Industrial Investment Banking said...

Hi Friends,

Investment bankers are trusted to make investment decisions under severe time pressure and not to lose the company money. They offer their expert advise as to where companies should put their money as well as providing advice on transactions such as mergers and acquisitions. Thanks a lot!

Yasmin said...

Investment banking is never a 9 to 5 job.

Anonymous said...

Hi friend
my name is diana
and a banker should get near 13,00000 thousand dollers a day home.

Anonymous said...

Hi friend
my name is diana
and a banker should get near 13,00000 thousand dollers a day home.

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Anonymous said...

Don't trust anyone's opinion who cannot spell the word "dollars" correctly.

Anonymous said...

Investment banking is NEVER a nine to five job. An "early" day ends at 10.

QUALITY STOCKS UNDER 5 DOLLARS said...

Those guys are over paid. Financial services creates nothing.

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