Investment Banking Salaries: A Comprehensive Guide to Compensation
Are you considering a career in investment banking or curious about the financial rewards in this high-stakes industry? This in-depth guide explores the average salary of investment bankers, banking career salaries, and the best paying jobs in major banks, with a focus on investment banking analyst starting salaries for 2023.
Understanding Investment Banking Compensation
Investment banking remains one of the most highly paid professions in the world, particularly for those who reach senior positions. However, even at the entry-level, the compensation packages are remarkably attractive compared to other industries.
Components of Investment Banking Compensation
- Base Salary: The fixed annual income, typically paid bi-weekly or monthly.
- Signing Bonus: A one-time payment offered to new hires, often with conditions attached.
- Annual Bonus: A performance-based bonus paid yearly, which can significantly increase total compensation.
- Benefits: Including health insurance, retirement plans, and sometimes perks like gym memberships or meal allowances.
Investment Banking Analyst Starting Salary: A Closer Look
The role of an investment banking analyst is the typical entry point for graduates. Let’s break down the compensation structure for first-year analysts in New York for 2023:
Top 10 Investment Banks by First-Year Analyst Pay (New York, 2023)
- Centerview Partners
- Total Compensation: $220,000
- Base Salary: $130,000
- Annual Bonus: $90,000
- Signing Bonus: $50,000 (for 3-year commitment)
- Known for: Advisory services on high-profile M&A deals
- Evercore
- Total Compensation: $210,000
- Base Salary: $120,000
- Annual Bonus: $90,000
- Known for: Strong M&A advisory and restructuring practices
- Lazard
- Total Compensation: $205,000
- Base Salary: $120,000
- Annual Bonus: $85,000
- Known for: Global financial advisory and asset management services
- Rothschild & Co
- Total Compensation: $198,000
- Base Salary: $113,000
- Annual Bonus: $85,000
- Known for: Independent advice on mergers and acquisitions
- Guggenheim Partners
- Total Compensation: $190,000
- Base Salary: $110,000
- Annual Bonus: $80,000
- Known for: Investment banking, capital markets, and asset management
- Bank of America
- Total Compensation: $186,000
- Base Salary: $110,000
- Annual Bonus: $76,000
- Known for: Full-service investment banking across various sectors
- Citigroup
- Total Compensation: $180,000
- Base Salary: $110,000
- Annual Bonus: $70,000
- Known for: Global presence and comprehensive financial services
- Goldman Sachs
- Total Compensation: $178,000
- Base Salary: $110,000
- Annual Bonus: $68,000
- Known for: Prestigious brand and strong deal flow
- JP Morgan
- Total Compensation: $175,000
- Base Salary: $110,000
- Annual Bonus: $65,000
- Known for: Large-scale deals and diverse financial services
- Morgan Stanley
- Total Compensation: $170,000
- Base Salary: $100,000
- Annual Bonus: $70,000
- Known for: Strong institutional securities and wealth management divisions
Key Insights into Investment Banking Salaries
1. Elite Boutiques Lead in Compensation
Smaller, specialized firms like Centerview and Evercore are offering higher compensation packages compared to traditional bulge bracket banks. This trend reflects the increasing competitiveness of boutique banks in attracting top talent.
2. The Goldman Sachs First Year Salary Benchmark
While Goldman Sachs has long been considered the gold standard in investment banking, its first-year analyst salary is now slightly below some competitors. However, the prestige and exit opportunities associated with Goldman Sachs continue to make it a top choice for many graduates.
3. Regional Variations in Banking Career Salary
The salaries listed are for New York City, typically the highest-paying location for investment banking roles. Other financial hubs like London, Hong Kong, or Singapore may offer different compensation packages, often adjusted for cost of living and local market conditions.
4. Performance-Based Bonuses: A Significant Component
Annual bonuses can vary widely based on individual and bank performance. In exceptional years, bonuses can exceed the base salary, making the total compensation much higher than the figures listed.
5. Career Progression and Salary Growth
While first-year analyst salaries are impressive, the potential for salary growth in investment banking is substantial:
- Associates (typically 3-5 years experience) can earn $250,000 to $400,000+
- Vice Presidents (6-8 years) might see total compensation of $450,000 to $700,000+
- Directors/Executive Directors (9-12 years) can earn $700,000 to $1,000,000+
- Managing Directors (13+ years) often earn well over $1,000,000 annually
Beyond Salary: Other Factors to Consider
- Work-Life Balance: Investment banking is known for long hours and high-pressure environments.
- Exit Opportunities: Many use investment banking as a stepping stone to private equity, hedge funds, or corporate roles.
- Skill Development: The fast-paced environment offers rapid learning and networking opportunities.
- Industry Trends: Increasing automation and competition from fintech may impact future job prospects and salaries.
Conclusion: Investment Banking as a Gateway to Highly Paid Professions
Investment banking continues to be one of the best paying jobs in major banks and remains a top choice for ambitious finance graduates. The average salary of investment bankers, particularly at senior levels, ranks among the highest in any industry.
However, it’s crucial to consider factors beyond compensation. The demanding nature of the job, coupled with the potential for substantial rewards, makes investment banking a challenging yet potentially highly rewarding career path.
For those aiming to enter this competitive field, focusing on academic excellence, developing strong analytical skills, and gaining relevant internships can help secure a position at top firms. Whether you’re eyeing a role at a prestigious institution like Goldman Sachs or considering the potentially higher payouts at elite boutiques, the investment banking sector continues to offer some of the most lucrative opportunities in the financial world.
Note: Compensation data is based on reports from Litquidity and Levels.fyi. Other well-paying banks like Qatalyst, PJT Partners, LionTree, Perella Weinberg, and Allen & Company may offer competitive packages but are not included due to limited publicly available data.
JPMorgan Chase & Co. (JPM) is taking decisive action to address the increasingly aggressive recruitment of its investment banking analysts by private equity firms, as revealed in offer letters to its 2025 analyst class. This move comes in response to the latest “on-cycle recruiting” frenzy in the private equity sector, which kicked off earlier than ever this year.
Key Developments in Private Equity Recruitment:
- Early Talent Acquisition: Top private equity firms are now sourcing candidates directly from undergraduate programs, even before they begin their investment banking analyst roles.
- Accelerated Decision-Making: Firms are implementing short expiration dates on their offers to expedite the process and secure top talent ahead of competitors.
The move aims to manage the accelerating trend of junior bankers accepting future-dated offers from these buy-side institutions early in their tenure at JPM.
The offer letters acknowledge the reality of this career trajectory while emphasizing the bank’s commitment to maintaining the highest standards of business practice and mitigating potential conflicts of interest.
Key aspects of JPM’s new policy include:
The offer letters acknowledge the reality of this career trajectory while emphasizing the bank’s commitment to maintaining the highest standards of business practice and mitigating potential conflicts of interest.
Key aspects of JPM’s new policy include:
- Mandatory disclosure: Investment banking analysts who accept future-dated offers from private equity or private credit firms must immediately inform their managers.
- Deal team restrictions: The disclosure of such offers could limit analysts’ involvement in certain transactions, particularly those involving or potentially involving their future employers.
- Policy review: JPM indicates it is reevaluating its approach to analysts who accept deferred offers from private equity and private credit firms.
- Potential employment implications: The bank suggests that accepting future-dated offers from these buy-side institutions “could result in us reconsidering the status of your employment.”
This policy shift reflects the ongoing challenge investment banks face in retaining junior talent, with many analysts viewing their roles as a stepping stone to private equity or private credit positions. The two-year analyst program has long been seen as a pipeline to these buy-side roles, which often offer higher compensation and different work dynamics.
JPM’s new approach signals a more assertive stance in addressing this talent drain and managing potential conflicts of interest. The policy aims to balance the bank’s need for top talent with the reality of career progression in the finance industry.
The move also highlights the increasing competition between investment banks and private equity/credit firms for top graduates. As private equity and private credit continue to grow and offer attractive opportunities, investment banks are forced to adapt their retention strategies.
Industry observers will be watching closely to see if this policy effectively extends analysts’ tenures at JPM and whether other bulge bracket banks implement similar measures. The long-term impact on talent flow between investment banking and private equity/credit sectors remains to be seen, as does the potential effect on deal-making and client relationships.
