![]() These numbers tend to stay the same for years at a time and then move up substantially in a short period, as they did in 2021. Base Salary: This is what you earn via paycheck or direct deposit every two weeks.Is a plan like “stay in IB, grind your way up, and retire at age 40 with $10+ million” still plausible/realistic?īut let’s do a refresher on compensation and go level-by-level first: Investment Banker Salary and Bonus Levels: The Main Componentsįor most bankers, there are five main components to “compensation”:.Given these lower bonuses, are private equity and hedge fund roles now even more attractive?.What will happen to bonuses in the future? Should you expect this level, or will 2021 ever return?.These developments raise many questions, such as: Their compensation is always the most tightly linked to deal activity, so it’s no surprise that it fell by nearly 50% this year. Of course, bankers always exaggerate their hours, but quite a few at the Associate level and above were working 50-60 hours per week for $300-$400K in total compensation.ģ) Bonus Distributions – While bonuses at all levels were down, Managing Directors took the brunt of the damage. Refinitiv has a good chart:Ģ) Hours / Lifestyle – Yes, deal activity was much lower… but the average hours were also down. It’s easy to interpret the much lower bonuses and deal activity as terrible news, but I would point out the following:ġ) Return to Normal – M&A activity in 2022 mostly represented a return to “2016 – 2019 normal” after a very inflated 2021. Many people go into investment banking jobs thinking, “My base salary doesn’t matter much I’ll earn another base salary with my year-end bonus!”īut this is wrong because banks base total compensation on a percentage of revenue, and revenue last year plummeted due to weaker deal activity: OK, So What Happened to Investment Banker Salaries and Bonuses Last Year?Īs I predicted in my last update, banks used COVID and the resulting disruptions, inflation, and panic as an excuse to raise base salaries while cutting bonuses. We have a survey estimate this year for Asia-Pacific (see below). Yes, the compensation in other regions – anywhere outside the U.S.I am summarizing the data across most banks, which means that some firms pay above and below these numbers. Yes, the elite boutiques pay above these ranges.NOTE: All numbers are pre-tax for New York-based front-office roles and include base salaries and year-end bonuses but not signing/relocation bonuses, stub bonuses, benefits, etc.Īs expected, these numbers are substantially worse than the 2021 numbers across all levels.īase salaries mostly stayed the same, but total compensation fell by ~15% to ~50%, depending on your level.īefore you leave an angry comment, here are two quick notes: That leads us to this salary and bonus update for 2023, which you can find below: Position Title When you see stories about “outrageous bonuses” or “Wall Street greed,” you know it has been a good year for bankers.Īnd when most stories are about layoffs or people pushing back their planned retirements, you know things are bad. If you want to know how investment banker salaries and bonuses are trending, look at the discussion and news stories about compensation.
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