Investment banking boutiques are hot. They’re sucking in a greater share of the investment banking fee pool, succeeding in persuading both junior and senior dealmakers across to their ranks and, free from regulatory constraints, are able to pay their staff what they want.
On a pay-per-head basis, boutique firms pay their staff more and they also pay in cash. But, as we’ve pointed to previously, it’s weighted towards the top ranks. Make it to managing director and up, and you’re treated more like a hedge fund partner than a bank employee, suggest compensation experts.
But it’s not as if large investment banks are going to sit back and take an exodus of their top employees across to boutique operations. In fact, when it comes to the vast majority of employees, large firms win out.
At the bottom of the pile, investment banking analysts earn a total package of £46.5k, according to figures from pay benchmarking website Emolument.com, compared to £57k at a larger firm.
Boutiques are actually blown out of the water at director and MD level, suggests the data, which is comprised of 2,140 front office investment bankers in London.
MDs earn 29% more at large banks than boutiques, it says, with total packages of £510k at large investment banks and £364k at smaller competitors.