Look at the newly-minted MD ranks at J.P. Morgan or Morgan Stanley and you’ll notice one thing – most of those being promoted have been at the firm for a long time. Compare that with Goldman Sachs, which tends to promote millennials to the upper ranks, and it might go some way to explaining the big pay differential between the banks.
J.P. Morgan pays its MDs 35% more its nearest investment bank competitor, according to new figures from salary benchmarking website Emolument.com, with total compensation of £919k ($1.4m). This is largely because of median bonus payouts of £612.9k ($893k), which are far larger than rivals'. The second largest bonuses are at Deutsche Bank and Barclays, both of whom paid a median of £400k ($582k). But Morgan Stanley is second overall with total comp of £682.9k ($993k), while Goldman Sachs is fourth in the MD rankings.
Goldman’s pay still ranks above most investment banks. However, the firm's tendency to promote young talent rapidly – talent which misses out on the slow accretion of salary increases over the years as a result - could explain why other U.S. investment banks rank above it. Around a third of Goldman Sachs' managing directors promoted in November last year were millennials.
If J.P. Morgan pays most at the top end, Morgan Stanley and Goldman Sachs appear to be doing more to keep their millennials happy. Morgan Stanley is the top paying bank for associates. It pays £88k salaries - second only to Bank of America, which pays £90k - and is among the most generous with bonuses (£48k). Goldman Sachs pays the biggest bonuses for associates (£50k) and comes in second overall. Both banks pay significantly more than their peers, Emolument’s figures suggest, with only Bank of America (total comp of £125k), coming close.