How much do investment bankers make
Investment banking pay consists of a base salary and variable bonus paid once a year. While banks have increased base salaries in recent years and constantly tinker with the salary/bonus mix, the below gives a general sense:
Associates:
- $150,000-250,000 base
- $50,000-250,000 bonus
- $200,000-500,000 total
Vice Presidents:
- $200,000-300,000 base
- $200,000-400,000 bonus
- $400,000-700,000 total
Directors:
- $300,000-400,000 base
- $300,000-600,000 bonus
- $600,000-$1,000,000 total
Managing Directors:
- $500,000 (some non-US banks require higher salaries and lower bonuses)
- $500,000-2,000,000+
How does boutique pay differ from bulge bracket
At the junior, analyst through vice president, levels boutique and sometimes mid-market firms pay 10-25% more than bulge bracket banks. Small and very profitable boutiques may pay as much as 50-100% more but junior employees may not have a path into the partnership at these very elite boutique firms, which may recruit leading executives and heads of state.
At the managing director and partner levels, the pay between bulge bracket and boutique firms may differ considerably. First, bulge bracket and publicly listed boutique firms will pay a significant amount of compensation in deferred stock. Furthermore, boutiques tend to subscribe to an 'eat what you kill' model where partner bonuses are based on a percentage of revenue booked. Bulge bracket firms tend to pay based on overall investment bank performance, followed by industry group performance and finally by individual performance. This approach results in many top-performing bankers moving to boutiques as they mature in their careers
How much is stock versus cash
The amount of stock versus cash compensation differs by bank, year and level. Vesting periods differ as well and even cash compensation can be deferred at senior levels. Analysts do not generally receive stock compensation and associates normally do not receive a significant amount. At the managing director and partner levels, stock compensation can reach 50% of bonus and in retention guarantee situations, most compensation vests over a 3-4 year period