The writing has been on the wall for a while now. Banks must treat their junior staffers with more love in order to stay competitive with Silicon Valley and other employers of top talent. First came the work-life balance rules – which seem to be more effective than we first thought – and now an even more important change: pay raises.
Goldman Sachs will increase 2015 salaries for junior bankers by more than 20%, according to the New York Post. First-year analysts will take home roughly $85,000 in salary, on top of any year-end bonus that they earn. A source told the paper that bonus payments would not increase next year. But based on historical averages, the median total compensation for junior bankers at Goldman may rise to as much as $140k. Not bad for a recent college grad.
The move comes just a few weeks after news broke that rival Morgan Stanley would increase base salaries for its associates and VPs by as much as 25%. At Goldman, the raises will affect all divisions, according to Bloomberg. Only junior workers within Morgan Stanley’s global markets and investment-banking divisions will see the financial windfall, says the Wall Street Journal.
Likely, pay increases for young bankers won’t be particular to just Morgan Stanley and Goldman Sachs. Rumors began circulating last week that J.P. Morgan, Citi and Bank of America are all eyeing similar initiatives. Like with the work-life balance rules, all U.S. banks will surely follow suit when it comes to compensation.
Wall Street or Silicon Valley? The decision likely just got a bit tougher for blue-chip graduates.
UPDATE: Indeed every bank is following suit!
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Quote of the Day: “Love what you do. Get good at it. Competence is a rare commodity in this day and age. And let the chips fall where they may.” – Jon Stewart