Traders Walking into Credit Suisse, New York

Starting salaries in investment banking positions with a bachelors degree after bonus (assistant or junior analyst position) range from $60,000 to $70,000. Starting salaries with an MBA degree range after bonus (associate position) range from $80,000 to $150,000. These salaries vary with firms and with the region of the country you are in. Bonuses typically would be 10-50% of salary to start and can move to one to three times salary later. Lately, salaries have increasingly included an equity component which may not be liquid for up to three years, although as an analyst you would typically be sheltered from this. This is good for the banks because it makes it much harder for people to move around.

As we write this in early 2009, banking salaries and bonuses are under attack due to the TARP program and the notion that public bailout payments might be subsidizing undue payouts. Nonetheless, it is important to bear in mind that many investment banks will continue to pay bonus compensation, that times will eventually improve and that many firms did not participate in the bailouts anyway.

Generic salary advice: Some firms tend to pay less than others because they can get away with it. You might actually be better off taking less. Obviously don't give yourself away but at the entry level, the quality of experience you get and the strength of the people you will work with are far more important than how much you get paid. You are trying to maximize the present value of your future earnings and enjoyment. This may involve taking lower pay now. Or, if you're lucky, it might not.

Salaries are down. All-in salaries plus bonuses are generally down 40% to 80% from their peak in 2007, depending on the firm. Quite a few people have been laid off or have received zero bonuses. Bonuses should trend up after 2009 assuming financial markets stage a recovery. Bulge firm salaries typically run 20% to 40% over boutiques and regional firms (although there are prominent exceptions to the rule). Forecast salary ranges in the 2009 to 2011 period are as follows:

Note: This table is based upon conversations with banking insiders in 2009. MM denotes millions. K denotes thousands of US dollars.

Examples of Specific Salaries in 2008/early 2009

Also Check Out:

• Salary Report from Bankers Ball (Note: Comprehensive but there may be some selection bias in survey methodology as numbers seem a little higher than our survey)
• Surfing the Cataclysm: Finding an Investment Banking Job in 2009
• Articles on Banking Bonuses
• 2008 Bonus Talk
• Obituary: The Bonus
• Wall Street Oasis Recent salary talk.
• Michael Page Salary Survey 2008
• Bonuses at Deutsche Bank
• Dealbook at NY Times - covers bonuses
• Trading Salaries in 2007 Detail by area of sales and trading
• How much are those bonuses?
• BLS Bonus Report
• Wall Street Comps Salary Survey

Other Resources

Other related resources that may be of interest to you include:

• Boutique Investment Bank Guide
• Headhunter List - very helpful to have good access to executive recruiters
• Guide to Restructuring/Bankrtupcy Investment Bankers - good market now
• Guide to Healthcare Investment Bankers - hot area in 2009

Salary and Industry Tales

At Bonus Time, No One Can Hear You Scream

This is a short novel, written sort of in the style of a diary. It starts out at "B minus 58" - 58 days until bonus communication. It is about the paranoid unhinging of a London investment banker as he counts down the days until he learns his bonus numbers. If you're in the capital markets business you know what I'm talking about.

No Tears: Tales from the Square Mile

More stories from the London i-banking world.

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The Insiders: A Portfolio of Stories from High Finance

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Ugly Americans

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The Wolf of Wall Street

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