Investment Banking Compensation 2020

The average Wall Street bonus’ climbed 10-12% last year as the coronavirus pandemic caused market volatility and a surge in equity capital markets. According to New York State Comptroller Thomas DiNapoli “The early forecast of a disastrous year for financial markets was sharply reversed by a boom in equity activity, historically low interest rates and surges in trading spurred by volatile markets.”

Bonus figures were mainly well received and did not appear to have been affected by COVID. While there was not a year-on-year increase across all years, expectations were well managed at most banks. Furthermore, the trend of shortening the Analyst cycle has continued with Barclays being the latest to shift to a two-year model.

According to Bloomberg, the securities industry’s bonus pool rose to $31.7 billion last year, up 6.8% from 2019. Growth after a recessionary event is unique, DiNapoli said, noting that the bonus pool dropped 47% in 2008 after the onset of the global financial crisis.

Additionally, Bank of America announced that effective May 1st the bank is bumping US investment banker salaries by $25,000 for associates and VPs and $10,000 for analysts, as Wall Street fights to retain junior talent amid massive deal flow.

Investment Banking Salary and Bonus New York

1. Base Salary: Standard Analyst base salaries are $85K, $90K, and $95K over three years at the bulge bracket banks and elite boutiques. Associate base salaries are also fairly standard at most investment banks at $150k, $175k, $200k for year 1, year 2, and year 3, respectively.  
2. Stub Bonuses: Since Analysts and Associates graduate from undergrad or MBA programs and start working in the middle of the calendar year, they receive “stub bonuses” for their first ~6 months on the job. These are typically a low percentage of Year 1 base salaries, such as ~20-30%. The average Associate stub bonus was $30-50K.
3. End-of-Year Cash Bonus: The year-end bonus is a percentage of your base salary, and it varies heavily based on deal flow, your performance, and industry-wide compensation. It might be as low as 50% of your base salary or as high as 200%, depending on your level.  All in comp is usually just a bit lower at large middle market investment banks , but can be considerably lower at small regional firms outside of New York.  In 2021, elite boutiques generally paid in line or better than bulge brackets. 
4. Signing Bonuses:  This year the average signing bonus might be around $10-$15K at the Analyst level and $30-$60K as an Associate. 

How Prospect Rock Academy Can Help?

We understand the financial recruiting landscape and have extensive experience working with hiring managers at Bulge bracket banks, Elite Boutiques and Private Equity firms. We can help you pinpoint what went wrong and help you course correct so that it doesn’t happen again.

• Clean-up, reformat and retarget your resume so that you can secure more interviews
• Linkedin profile analysis
• Sample mock interview questions
• Sample technical interview questions
• Target Company recommendations
• Target Company Prep Exercises
• Mock-interviews
• General guidance and support

We know the banks and know what they are looking for. With our guidance and support we will help you navigate this ultra-competitive job market and land your dream role.