The 2025 IB Comp Headlines Are Misleading

Here’s What the Data Actually Shows

Early findings from the 2025 Investment Banking Compensation Survey  |  Close to 400 respondents  |  February 2026

Every bonus season, financial news outlets run their annual comp reports. A number from an elite boutique or a top group at a bulge bracket gets picked up, and suddenly it becomes the assumed baseline—as if every banker at that title is taking home the same thing.

Those numbers aren’t fabricated. But they represent a top performer, at a top-tier bank, in a high-performing group, working under a revenue-generating MD who had a strong year. That’s a narrow intersection of variables, and it gets reported as though it’s the norm.

Early findings from the 2025 IB Compensation Survey—close to 400 responses across bank types and seniority levels—tell a different story. The sky-high numbers are the exception, and even when the headline is real, the actual economics are far more complicated than they appear.

What Bankers Actually Earn, by Level

The headline numbers imply a world where VPs clear $700K and Directors make $1M. Here’s the reality:

The median VP earns $550K—not $700K. 30% earn under $500K. The median Director/ED earns $720K, not the million-dollar figure that makes headlines. Even at the MD level, the median is $950K, and one in five MDs earns under $700K. The $1.5M+ MD is a bulge bracket or elite boutique phenomenon, not the typical outcome.

Group Heads are a different category entirely—their comp is essentially a function of group P&L, with 77% of pay as discretionary bonus. These numbers aren’t comparable to any other level.

Same Title, Different Universe

Title alone tells you almost nothing about comp. Bank type creates gaps of hundreds of thousands of dollars:

A VP at an elite boutique earns $680K; the same title at a boutique pays $416K. A D/ED at an EB earns $950K; at a boutique, $500K. That’s a $450,000 gap for the same seniority.

Coverage group adds another layer. Among VP+ bankers, Leveraged Finance ($710K median) and Healthcare ($700K) pay 40–60% more than Aerospace & Defense ($535K) or Biopharma ($450K) at the same title. The people generating the headline numbers are in hot groups at top banks, working under MDs producing outsized revenue. That’s a very small slice of the industry.

The Strings Attached: Deferred Comp, Clawbacks, and Garden Leave

Even when the headline number is accurate, it dramatically overstates what a banker actually takes home—and what they’d keep if they left. Three mechanisms work together to widen the gap between total comp and economic reality, and all three intensify with seniority.

Deferred Compensation

As bankers get more senior, a larger share of comp is bonus—and a larger share of that bonus is deferred:

*Small sample size; directionally indicative.

At elite boutiques, 67% of VPs already have 26%+ deferred. At bulge brackets, 67% of both D/EDs and MDs do. The firms paying the biggest headline numbers are also withholding the most.

What does this mean in practice? A Director at a bulge bracket earning $775K has roughly $449K in bonus. If 28% is deferred, that’s ~$126K locked up. Cash comp before taxes: ~$649K. After federal, state, and city taxes in New York, take-home lands somewhere around $390–$410K. That $775K headline just became ~$400K in the checking account.

Deferred comp typically vests over 2–4 years and is contingent on continued employment. Leave before vesting, and you forfeit it. It’s not just a timing inconvenience—it’s a retention mechanism designed to make walking away expensive.

Clawbacks

Clawbacks go a step further—they’re money already paid that the firm can reclaim if you leave within a certain timeframe. Rates increase with seniority: 10% of VPs, 16% of D/EDs, and 15% of MDs have clawback provisions.

The median D/ED clawback is $300,000, representing roughly 43% of total compensation. At the MD level, clawbacks average $350K. These are most common at elite boutiques and middle market firms (17% each). Bulge brackets tend to rely on longer garden leave and higher deferral rates instead—different tools, same outcome.

Garden Leave

Garden leave—the mandatory notice period before you can start a new job—escalates sharply:

At the MD level at bulge brackets, 86% have 3-month+ garden leave. At Canadian banks, it’s 100%. If you’re an MD who resigns in March after bonus, your garden leave means you don’t start at the new firm until June—halfway through the year, with limited ability to build the deal flow that drives your next bonus.

When the Strings Compound

Among VP+ respondents, 42 have at least two of these three restrictions. The higher you climb, the wider the gap between what you earned on paper and what you’d actually walk away with.

The Bottom Line

The 2025 bonus cycle was strong—73% of respondents reported higher comp than last year, and 42% saw increases of 20% or more. There’s real money being made in banking.

But the numbers that dominate the news are not representative. They’re drawn from top performers in high-performing groups at elite boutiques and bulge brackets. For most bankers—even senior ones—the reality is meaningfully different:

The median VP earns $550K, not $700K. 30% earn under $500K. The $680K VP is an elite boutique number.

D/EDs cluster around $700–$850K, but half have 26%+ deferred and 48% have 3-month+ garden leave.

The median MD earns $950K, not $1.5M. One in five earns under $700K. The seven-figure MD is a BB/EB phenomenon driven by specific group performance.

Deferred comp, clawbacks, and garden leave compound with seniority. The biggest headline numbers come with the most money locked up, the most money at risk, and the least ability to move.

The question to ask isn’t “What was your total comp?” It’s “What did you take home, how much is locked up, what do you owe if you leave, and how long until you can start somewhere new?”

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Methodology: Early findings based on close to 400 self-reported responses to the 2025 Investment Banking Compensation Survey, collected December 2025 through February 2026. Respondents span bulge brackets, elite boutiques, middle market firms, Canadian banks, boutiques, and other institution types. All figures are self-reported and unverified. Additional responses are still being collected.