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.
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