Proof, as if it were needed, that it’s a good time to be a junior investment banker. Buoyed by 20% pay increases and paranoia of a buy-side exodus, investment banks are now paying their analysts more than they did at the height of the pre-crisis boom.
Yes, analyst bonuses have just been paid and, according to figures acquired by Mergers & Inquisitions, banks have been unusually generous. It might be an ominous sign of another looming crisis to some, or simply the result of a competitive job market, but banks are now paying their analysts more than they did in 2007.
First year analysts received bonuses of $65-80k, which rose to $85-100k for second years and $90-120k for third-year analysts. The sweet spot for first year analysts was $75-85k – this was what most banks paid – but if you were closer to the bottom of the pile you received $60-65k. One ‘elite boutique’ supposedly paid $100k to a first year.
Factoring in average salaries of $85k, $95k and $105k for the three analyst levels then total comp comes in at $150-165k (analyst 1), $180-195k (analyst 2), $195-225k (analyst 3). This is, according to M&I analysis, the best year since 2007.
But wait; investment banking pays well but it also requires long hours – despite recent concessions to allow analysts a bit of time off – and this is bad news. If you work more than 40 hours a week on a consistent basis – and let’s face it you’re not even in the investment banking game unless your clocking 70 hours plus – you will have “increased mortality by 20%”, suggests new study by Stanford and Harvard researchers. If your working patterns increase stresses in your homelife you have increased odds of self-reported ill-health of 90%.
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