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The truth about analyst bonuses

Most banks have now announced bonuses for junior staff. And despite rumours that zeros were widespread at some firms, the surprising news is that on the whole payouts in corporate finance don’t appear to have been that bad at all.

“Most second and third-year analysts at bulge brackets have received 100% of salary,” says Logan Naidu at recruiters The Cornell Partnership. “Last year’s payouts were generally in excess of 150%, so this year’s are down substantially, but they’re still good in mere mortals’ terms.”

Abid Hussein, a private equity consultant at recruitment firm EM Financial Services, says payouts are fairly uniform across top firms, but that the differential between top and mediocre performers has increased.

“While top performers got 100% payouts, rumour has it that one or two bottom performers received as little as 4k-7k,” he says.

Hussein adds that both Goldman and Morgan Stanley paid bonuses that were 15-25% more than other banks at analyst level.

Hussein adds that a couple of banks are now offering analysts stock options: “This would have been unheard of a few years ago.”

Bonuses for top ranked analysts, investment banking, 2008

First-year analysts: 35k-37k base; 16k-35k bonus (up to 40.5k at Goldman and Morgan Stanley).

Second-year analysts: 45k base; 20k-45k bonus (up to 55k at Goldman and Morgan Stanley).

Third-year analysts: 50k base; 40k-60k bonus (up to 70k at Goldman and Morgan Stanley).

Source: EM Financial Services

Comments (24)

Comments
  1. What areas of banking these numbers refer to?…Looking at numbers my guess is in M&A/Trading/e.t.c..what about for Analysts associate work in FO credit?

  2. These numbers must be M&A/IBD only, where there is terrible bonus progression between 1st and 3rd year. In Sales & Trading, 2nd/3rd yr analysts still make bonuses a MULTIPLE of their salary. 80-90k was a typical 2nd year bonus here for Sales & Trading this year, whereas virtually everyone got 6 figures same time last year.

  3. Sorry – it’s M&A/corp finance. Now clarified in the text.

    Sarah, Editor, eFinancialCareers Reply
     
  4. No problem at all. Any numbers for Analysts work in FO credit fixed income and derviatives? also any numbers for Tier 2 banks?

  5. What about bonuses in FO equity research?

  6. Interesting article…

    Does anyone have any idea what the typical bonus level ( if any ) is for a back office at large hedge fund like Man group as i’ll be starting as a grad in october and have nothing to base any expectations on! Better or worse than ib?

    Cheers!

  7. Bonuses it’s like a foreign language for junior staff maybe not all but for me it’s just increasing my tax

  8. Chris Neal – any back office job is bound to have a bonus structure lower than a front office job. however being a large hedge fund, the gap between front and back office may be shortened.

  9. I have to disagree as I made a bonus of around 35,000 for a stellar peice of work i completed

  10. Hi Gopanb. If you’re succesful team you can probably expect a bonus of 100-150% of basic salary. This doesn’t apply to structured credit.

    Tom Robson, Selby Jennings Reply
     
  11. A Landsdowne partners pay up to 100% of wage for bonuses mind you this was about 2 years ago market conditions have changed

  12. Very interesting article with concrete figures. Please, feel free to write an article including figures for employees in Operations…

  13. can anyone put a ballpark figure on hedge funds grad bonuses – marketing and client services dept. ????

  14. If you are a front office quant in a hedge fund they pay much worse than banks

  15. chris, from first hand experience, Man pay average salaries but bonuses can be excellent given that a small group churns out mind boggling revenue.

  16. HF bonuses on marketing and IR side around GBP 10k with 3 years of front office analyst experience in eq sales. HF around $2bn in size. Basic GBP 50k.

  17. Thanks for your comments ibanker,annon and tomas.

    Wow so even on the front office quant side bonuses are pretty low compared to the numbers bounded around in this article for analysts at Ib’s . im surprised i thought HF’s especially someone like Man group would be top of the pay and bonus tree.

  18. The top VPs in GS Operations made 100% of basic salary as bonus in 2007.

    Back Office Superstar Reply
     
  19. I will begin a 2 year grad prog in SocGen in sales/trading. Does anyone have any idea of what bonus I can receive throughout this period on top of my base salary? Bear in mind that it consists of three 8 month rotations on different FI and Equity desks. Thanks

  20. SocGen pays about 40% in the first year.

  21. Could anyone give numbers (first years salaries/bonuses) for IT in IB?

  22. Thanks Kate. Do you know if this figure will increase throughout the second year?

  23. Can any one tell me what pay I can expect in a front office role in a hedge fund? 1st year I was paid 30K + 10K (only operational for 6months as i didnt have my FSA exams), now in my second year and on 45k base, and wanted to know what to expect as a bonus, and as 3rd year salary?

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