If you pursue a career in ‘investment banking’ – or more specifically, in the so-called ‘front office’ investment banking positions of mergers and acquisitions, capital markets, or sales, trading and research, how much can you expect to get paid in total?
In the past, earnings for junior traders in particular rose exponentially – take Kweku Adoboli, the UBS ‘rogue trader’ who went from a salary of £50k and a bonus of £15k in 2008, to a salary of £110k and a bonus of £250k in 2010.
These days, however, the increases in investment banking pay are more ‘modest’. This is especially the case in trading, where compensation has sort of come down to earth – or is at least rising at the same more moderate rate as in investment banking. Nonetheless, banking pay is still high. We’ve looked across a range of recent banking compensation figures for the U.S. and London from Emolument, Wall Street Oasis, Mergers and Inquisitions, Glocap and combined them with our own research.
Investment banking pay is still performance-related, so there’s still a big range between the high earners and the so-so earners, but this is what that range seems to look like now:
So, this is how much you should earn as a very young banker (AKA an analyst) who’s just out of university (21-24, approx)
If you’re just out of university and just into your front office career in banking in London or New York, you can expect to earn (in total, salary AND bonus) in the first few years:
Year one (1st year analyst): Anything from $80k (£59k) (the low posited by Wall Street Oasis) to $145k (£89k) (the high for top-performing first years, posited by Glocap).
Year two (2nd year analyst): Anything from $103k (£63k) (Wall Street Oasis) to $174k (£107k) (based on Glocap’s figures and recruiters’ pay surveys in London).
Year three (3rd year analyst): Anything from $108k (£67k) (Wall Street Oasis) to $195k (£120k) (based on Mergers and Inquisitions’ figures for bonuses and our own research into salaries).