Investment Banking Bonus Schedules: Top Banks’ Payout Dates

The investment banking industry operates on a unique calendar that influences hiring patterns, employee retention, and career planning. Understanding this cycle is can be extremely helpful when navigating your next job search.

Hiring Seasons

Dry Season (October to January)

The period from October to January is typically known as the “dry season” for hiring in investment banking. This timing is influenced by several factors:

1. Most full-time recruitment for analyst and associate positions concludes during this period.
2. Banks are often finalizing their year-end financials.
3. Banks are typically not interested in buying out bonuses/RSUs with less than 1/4 of the year remaining. 
4. The industry is preparing for bonus payouts.
5. The holiday season in December and early January can slow down hiring processes.

Busy Season (Post-Bonus Payout)

The hiring market typically becomes more active after bonus payouts, which for most banks occurs between January and March. This period is often referred to as the “busy season” for hiring.

Analyst Cycle

Investment banking analysts have a unique schedule:

1. New analysts typically start in the summer after completing their undergraduate degrees.
2. They receive their first-year bonus a full 12-months after their start date.
3. Analysts don’t switch to the calendar year bonus schedule until they are promoted to associate (often referred to as “a to a” or analyst to associate).

This structure creates a situation where analysts might consider job changes around their anniversary dates rather than aligning with the calendar year bonus cycle of more senior positions.

Bonus Schedules

Bonus announcement and payment schedules vary across banks. Here’s a snapshot of possible schedules for various investment banks:

   UBS                                                           March                                                      May

   Oppenheimer                                         Jan                                                            Feb

   MTS                                                     Jan                                                        Feb

Implications

1. Career Planning: Laterals in the industry often time their job searches and career moves around bonus payouts.
2. Recruitment Strategies: Banks must consider these cycles when planning their hiring efforts, potentially ramping up recruitment after bonus season when more candidates are in the market.
3. Retention Efforts: Banks may focus on retention strategies in the lead-up to and immediately following bonus payouts to prevent talent loss.
4. Analyst Considerations: The unique analyst cycle means that banks may need separate strategies for entry-level recruitment and retention compared to more senior positions.

Understanding these cycles is crucial for navigating a career in investment banking, whether as a job seeker, current employee, or hiring manager.