How much do investment bankers earn?

by Girl Banker
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This is the one question that everyone wants answered. Investment bankers' compensation is made up for two parts - base pay and a bonus. 

• Base pay is usually relatively uniform across the firm for people of that level. 
• The bonus varies according to how hard you work and of course how great an ass licker you are! Some people really know how to work the system. 

Base pay is very transparent so let's start with that:

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Excerpt from To Become an Investment Banker

What about VPs and MDs?
Base pay for VPs and MDs doesn't rise hugely above the levels you see in the above table. Their compensation varies a lot more because of their bonus.

Which banks pay the most?
American banks tend to pay more than UK banks. UK banks tend to pay more than European banks. This is partly because big American banks make more but it's also cultural. The American dream is a capitalist one: make as much money as you can. Making money is synonymous with hard work in America. 

As you move towards the UK strong socialist ideals start coming into play. This is even more true for the rest of Europe. 

So what about the bonus? 
Bonuses are very variable especially during a recession. The bonus is more fixed at junior levels with larger differences between people at more senior levels. Bonuses can range from 0% to several hundred percent of base pay. 

Some websites will try to correlate pay with years in the industry but this is one industry where tenure matters very little. I have seen Associates earning much more than VPs because they are adding more to the bottom line. That's how it works. Whether you're an MD or a department head is of little consequence compared to how much your department or team earned for the bank.

What does the structure of bonuses mean for you? 

• Don’t spend it until you get it. 

What does the structure of bonuses mean for your bank?

• In challenging years, they can cut costs significantly by chopping the bonus pool.
• In profitable years, they can share the success with their most valuable asset: the people.

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