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Salary survey: VPs the new VIPs?

Did VPs receive some of the biggest pay increases in the last bonus round?

A new salary survey suggests they may well have done. Recruitment firm Fennemore Banks’ study of 238 London bankers suggests vice presidents (VPs) in investment banking saw bonuses up an average of 18%.

This was higher than the boost received by most associates, and higher than analysts’ average rise of 16%.

Adam Cairns, a director at Fennemore Banks, says VPs are flavour of the month because banks are suddenly keen to bring in people who can originate deals. “There’s been little requirement for junior to mid-level VPs in the last five years – team structures have been more senior managing directors as originators and the analysts and associates who are executing deals,” he says. “But banks are now trying to attract and retain potential future originators.”

Second-year VPs received average total compensation of 303k last year, according to Fennemore. Third-year VPs enjoyed total comp of 352k.

But while VPs are undeniably handsomely paid, not everyone is in accord with Cairns’ analysis of the market.

Neil McKay, consultant at search firm Sheffield Haworth in London, says he knows of at least one second-year VP who took home 550k last year. But he says banks’ appetite for mid-ranking bankers is no heartier than before: “There’s a lot of demand for everyone, VPs included.”

This is confirmed by a senior headhunter at a rival firm. “If banks want origination talent, they hire managing directors,” she says. “They’re really interested in people who can make a difference quickly – it could be six years before a VP can command a relationship and by that time we’ll be at a completely different stage in the cycle.”

A study earlier this month of 350 European M&A staff by IntraLinks, a secure workspace provider, for Financial News, found 69% plan to hire this year, with the Nordic region and Germany areas of particular focus.

Pay for VPs 2006/2007

Vice president one

Basic: 75k. Bonus 223%

Average total compensation: 242k

Vice president two

Basic: 83k. Bonus 266%

Average total compensation: 303k

Vice president three

Basic: 88k. Bonus: 301%

Average total compensation: 352k

· Source: Fennemore Banks

Comments (29)

Comments
  1. Salaries are not as high as I had anticipated when I was a student. Heard all these rumours and press headlines, which is now clear that the astronomical packages are only rewarded to a select few. Below is an indication to what I think salaries currently stand at. Is there no accurate data on how much to expect depending on what level you are at in the hierarchy, division and firm, i.e. VP, DCM, Bulge Bracket.

    A member of my team recently had the biggest smile on his face when was awarded a bonus and I thought he has received a whopping big payout like some millions the way he was going on about what he should buy. Then I found out that all he is getting is 450k. So who is actually making the millions we are led to believe are paid out in the city. I am an Analyst by the way and am on a salary of 35k + Bonus and got a total package of about 60k and was told that is good for a 1st year. Anyone else keen to share. Below is an estimate from my research as to what I think salaries at various levels consist of. Are they relatively correct?

    Anonymous, Part 1 Reply
     
  2. Estimate of salaries

    First/Second Year Analyst
    Salary 35k + Bonus
    Total = 60

    First Year Associate
    Salary 70k + Bonus
    Total = 130

    Second/Third Year Associate
    Salary 85k + Bonus
    Total = 250

    Assistant VP
    Salary 100k + Bonus
    Total = 350

    VP
    Salary 150k + Bonus
    Total = 450

    Director/Principal
    Salary 175k + Bonus
    Total = 650

    MD
    Salary 250k + Bonus
    Total = 1 mil+

    Dept Head
    Salary 450k + Bonus
    Total = 4-5m +

    Anonymous Part 2 Reply
     
  3. And even these numbers are high too – dont believe what the papers are writing, jornalists have to write something to provoke a reaction. There are no more than 100 people that are paid more than 1m in the City, and at least 2/3 of it is in shares

    another anonymous Reply
     
  4. what areas are you all working in? im a AVP at JP and don’t get paid as much as any of you

  5. If these aren’t high salaries…I don’t know what you are expecting…

  6. You earn enough money. Shut up!

  7. Are you sure as I have been led to believe that many MDs after bonus get a million. I maybe wrong as haven’t been in the industry long.

    I haven’t even been able to find out what salaries bankers in my company are getting, not even on my desk. No one discusses salaries so i don’t know what to expect. I spoke to a headhunter and he said he can always get me more but thats his job. When I spoke about compensation for senior bankers he explained that with bonuses 1mil is becoming the norm for senior bankers. Probably lying then, but can anyone shed light on this?

  8. The Office for National Statistics (ONS) states that the average male worker in the Square Mile was paid a total of 105k in 2006. This includes salary plus bonus.

    The average female City worker earnt 51k in 2006; the average male worker outside the City was paid 31k in 2006. In short, male City workers earn 2 to 3 times more than everyone else.

    However, if we factor in that Cityboys work, say, 50% more hours… The tiresome, irritating, crowded commute at silly hours of the day… And the cost of living is 50% to 100% higher than everywhere else in Britain…Then that 105k salary becomes somewhat less attractive.

    Take into account those extra hours and greater costs, and the real salary of an average City hero is probably closer to a less-appealing 50k per annum.

  9. I don’t know where you get this figure of a 100 people earning > 1m – it was widely reporting in 2006 that 3000 people in the city earned over 1m – in short, if you work at a major US bank, it’s likely that 100 people just in your firm earned that!

  10. Try working out your real pay per amount of hours worked.

  11. Re. VP I would say that 100 for fix is really top of the range

  12. I started working in the City in 1987 – selling life insurance to investment bankers, whose income multiples (compared to my commission-only-misery at the time) immediately attracted me to the industry.

    I, like most others who stayed in that industry for longer than one business cycle, worked very hard and created considerable economic freedom for my family and myself. There are following points to make:

    – my children grew up with their mum. The times they ASKED for their dad were rare.
    – all but one of ALL my former team collegues are divorced
    – my friends are either from pre-school, school or too busy to really talk to me about what’s really important for them

    Sure you are all much smarter than me: you won’t let your partnerships suffer so much because you will leave work before 8pm, you won’t let your children unattended for so long, and you won’t compromise your social life as much as many of my collegues did.

    Be sure the thing that will REALLY get me worried is if ever one of my children starts getting interested in following up a career in investment banking. I will do my very best to get them off that nonsense.

  13. I think these salary levels are way too high. I’ve been in the derivatives trading industry for 8 years, and my view on basic salary is as follows (based on years, not “level”) :

    1-3Y : 40-65k
    3-5Y : 50-100k
    > 5Y : 80-150k

    Basic salaries tend to be capped at around 125-150k, you may go to 175k for MD positions or so, but rarely above. The big chunk comes from bonuses at that point.

    Derivatives Trader Reply
     
  14. Derivatives Trader can you give an indication of the bonuses given also.

  15. I was promoted recently to VP at a tier 2 bank and was given a base salary of 65k, which I negotiated up to 75k.

    I have calls from headhunters that they can get me a higher base about 85k at a better firm where it is likely I would get a higher bonus.

    Is this realistic or is a 75k base on par with the industry.

  16. please can someone give me a front office role ?? :(

    back office bitch Reply
     
  17. this approach won’t help. try the bank you are working at.

  18. I know two Junior VP’s who made bonuses of substantialy more than 500,000 Sterling . I think its all much less about the industry and more about the desk you are luck enough to work on. If business is being done there is money in the pot!

  19. It’s a shame we don’t have more people willing to give their salary and Incentive comp details by bank, as then we’d have a better idea of the City as a whole.

  20. 3rd Yr Assoc — Base 75k expected bonus 175k – 200k

  21. AVP2 Major Investment bank (non M&A or ECM function) – 65k + 60-80% bonus

  22. Hey do you guys have any idea how much investment bankers in the VP category in India are making in dollar terms?

  23. Don’t know if this can Help but 1st Year Analyst Top Tier American Bank, 36K fix + bonus to be discovered very soon… Expected total = 60k
    I heard 1st Year Associate: 65K+ 40 Bonus

  24. Am an estate agent with a minimum wage tracker basic..where do you guys get this figures from & how do i get into the trade preferably back/middle office

  25. Any ideas what a non-revenue producing VP or Director could expect to earn in a tier 1 European bank – salary & bonus?

  26. VP in India could make anywhere from US$100k to US$150k fixed at likes of UBS or JP

  27. Any Ways these salaries are far better than what a Finance professional gets in to manufacturing sector.

    narendra kumar jain Reply
     
  28. i think most ppl above are correct but above all about specific desk – if your desk is making say 10M USD per trader you should expect a VP to get around 500k total comp or more.

    Derivs Trader x2 Reply
     
  29. I am joining at AVP level and entering IB for the first time and looking at the figures, 75K basic isn’t too bad for me. Hope someone agrees with me.

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