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The current state of salaries, bank by bank

Investment banking salaries in London

What kind of salary should you expect when you work for an investment bank in London? While bonuses in investment banking traditionally varied widely according to performance, banking salaries were historically dependent upon job title. It was possible to predict salaries for analysts, associates, vice presidents, executive directors and managing directors with a degree of certainty.

Not any more.

Although analyst and associate salaries are still reasonably standard, recruiters say salaries for vice presidents and managing directors have begun diverging widely as a result of the European Union’s bonus cap, which restricts bonuses to 2x salaries.

“At MD-level in London, we’re seeing salaries typically ranging from £350k to £550k,” says the head of one search boutique, speaking on condition of anonymity. “But there are some people who are on £600k+. It’s entirely driven by restriction on bonuses – banks are looking at how much they want to pay as a total package and adjusting salaries so that bonuses are no more than two thirds of the total.”

At most banks, high salaries for “material risk takers” (MRTs) – a category that typically includes all managing directors as well as anyone earning more than €500k (£392k), are now supplemented by “role-based allowances.” When UBS published its remuneration report last week, for example, it said some of its 571 MRTs were receiving allowances associated with their roles and that the allowances were comprised of, “an immediate cash portion along with a blocked UBS share award.”

“When you see an MD salary of £500k, that usually includes the allowance,” says another fixed income headhunter in London. Some banks, like Deutsche, don’t pay allowances, however, and are hiking salaries as a result. With bonuses correspondingly reduced, overall compensation at the bank is expected to be the same.

On the whole, however, recruiters in London say salaries are fairly similar to last year. Some banks, like UBS, have indefinitely postponed proposed salary increases following the challenging start to the year. Others, like HSBC started trying to implement salary freezes and then back-pedaled when it became apparent that staff were unhappy. HSBC has now promised to fund salary increases for junior staff using the 2016 bonus pool – although recruiters say this hasn’t happened yet.

“Junior and mid-ranking salaries at most banks in London are very similar to last year,” says Andy Pringle, managing director at recruitment firm Circle Square Talent. “Some European banks only increased salaries late in 2015, so it’s early for them to start increasing them again.”

Recruiters say most banks pay their IBD professionals salaries that fall within the following ranges:

1st year analyst salaries: £50k to £55k

2nd year analyst salaries: £55k to £57k

3rd year analyst salaries: £50k to £65k

1 year associate salaries: £90k to £98k

2nd year associate salaries: £95k to £110k

3 year associate salaries: £100k to £120k

VP salaries: £120k to £175k, depending up on level. Average is £150k

MD salaries: Typically £350k to £550k, although some people are rumoured to be on £600k+.

Morgan Stanley pays the highest salaries 

Recruiters in London say Morgan Stanley pays some of the highest salaries in the City.  At Morgan Stanley, for example, recruiters say all vice presidents are on salaries of £175k. By comparison, Deutsche Bank’s recent salary increase for vice presidents took its VPs to somewhere in the region of £140k. 

Salaries are typically a lot lower for VPs in European banks

“As a VP, it’s much easier to get a salary of £150k+ at a US bank,” says one headhunter, speaking anonymously. “European banks like BNP Paribas, HSBC and RBS pay a lot lower,” he added. “Some of them are all over the place – we’ve seen the equivalent of a third year vice president at BNP Paribas on £80k.”

Among the European banks, Credit Suisse has a reputation for being particularly generous with salaries in its investment bank – although this advantage may yet be eroded as the bank rethinks its strategy. French banks and RBS have a reputation of paying the least. RBS’s salaries are low even though bonuses at the bank are restricted to 100% of salary. 

Emolument.com, the real time pay benchmarking company, looked at the salaries of 6,500 front office bankers in London last month and provided the following data on salaries at European banks in the City. Notably, these are for all levels of analyst, associate, VP and MD and will therefore be influenced by the relative seniority of the individuals providing the data.

Comments (30)

  1. canadian banks are not in lower payers category. they are in much lower payers category.

  2. So is this just front office? How about a feature on back office (risk, compliance, tech, comms etc)?

  3. Figures are wrong for BAML.

    Director/ED are on 175K. Not sure about the other bands though

  4. Are JPM VPs really that underpaid?

  5. VP levels seems a bit on the low side, Director a bit on the high side … Unless we’re talking about middle level VP versus senior level Director …

  6. and way at the bottom State Street (both GM and SSgA) – some VPs there are not even on 100k. For custody business where they are high on league table that is ok but for GM this is very low. SSgA also way lower than Blackrock/BGI and other main competitors.

  7. Thanks Sarah!!!! Really useful! How about Comms/PR? Anything planned for that area?

  8. Figures are wrong for HSBC => VP 110K +5 or car allowance

  9. Czech banks = 10K per annum at most, so don’t complain!

  10. are the Czech bank still doing luncheon vouchers ?

    JohnThompson666 Reply
  11. views/comments on State Street Global Advisors (SSgA)?

  12. DB is incorrect also. Directors are on 175k

  13. I know VPs at JPM who earn a lot more than that – and that’s outside the Front-office…

  14. What about BO/ MO Salaries

  15. @Sarah: Is this total comp or only base?
    Very interesting for me would be associate pay…

  16. Some incorrect/inconsistent/biased data across quite many banks.. You lose some credibility with not-so-well researched sources or data..

  17. RBS off the mark – closer to the rest of the pack – D 180 – 220k.

  18. Does anyone have an idea what Barclays VP / AD gets paid?

  19. DB VPs are on 125k

  20. Come to Australia. I’m a first year VP at one of the above mentioned banks on 200k equivalent.

  21. What about Lloyds? It must be lowest of the whole lot!

  22. …come to Hong Kong if you get the chance. Basic salaries are very similar, but at a 13-15% tax rate.

  23. Any chance of Legal comparison?

  24. is the 200k VP salary of goldman really correct?

  25. Interesting article, anyone know any comp surveys for Ds and MDs in securitisation / DCM ?

  26. Does anyone know the starting salary for Director grade in London at Barclays?

  27. Are these total comp after bonuses? Morgan Stanley London does not pay those bases across the board. It sounds a lot like someone has somehow incentivized EFC to skew an article that provides almost no detail as to how they came by those numbers.

  28. Definitely know FO VP London GS much less. Maybe 85-100k£ base at start. Total comp 150£K considered good. This is on stable 60 hour weeks so not so bad.

  29. Figures are overstated for Morgan Stanley VPs. Base salary for FO VPs is anywhere between £95k and £130k with a median near £110k. Bonuses vary a lot across producers and non-producers, I’d say the median is around ~£50k

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