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Can you make massive money in investment banking?

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Original post by throwawaycon
I think that is unlikely to exclude as many people as you seem to think. Either way, it's more convincing than anecdotal data.


Fair game. It's still doesn't paint an accurate picture considering management/senior management of nonrevenue generative departments are lumped in. Skews the average down.

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Original post by Princepieman
(which is split between cash and stock at the higher levels).


Suppose it makes sense. Most will save (read: invest) a portion of their bonus anyway. So long as the options are sensible (which I suspect they would be at an IB) it's a good way to keep the compensation from looking outrageous to the extent that there is further incentive that provisions are made and it may even make the employees job easier since they don't have to deal with putting what is probably not an insignificant amount of money through and index fund. Does it also protect it from being taxed if done this way?

Original post by Princepieman
Fair game. It's still doesn't paint an accurate picture considering management/senior management of nonrevenue generative departments are lumped in. Skews the average down.Posted from TSR Mobile


And corporate bodies who make less than the bankers if I understand correctly.
Original post by BizzStrut
Suppose it makes sense. Most will save (read: invest) a portion of their bonus anyway. So long as the options are sensible (which I suspect they would be at an IB) it's a good way to keep the compensation from looking outrageous to the extent that there is further incentive that provisions are made and it may even make the employees job easier since they don't have to deal with putting what is probably not an insignificant amount of money through and index fund. Does it also protect it from being taxed if done this way?


You would pay tax upon vesting of the stock but would also be subject to capital gains if you held on to the stock for a longer period of time. So say, a bit of your bonus came to ~£50k worth of stock (at the price of issuance). There's a vesting period of 3 years, in other words ~£16.7k worth of stock a year (could be worth more if the stock increases or worth less if it decreases).

You'd pay tax on that, which works out to: the price of stock at the time of vesting x your number of shares x the income tax rate - that tax is paid by the firm in cash (i.e. they'd sell a portion of your shares then pay it to HMRC) and you're given the remainder of the shares. If you choose not to sell upon vesting, you could hold on to the shares with the hope that they appreciate, then when you sell you'd pay the lower capital gains tax.

And corporate bodies who make less than the bankers if I understand correctly.


Yeah, general management/senior management is included as well as heads of ancillary business units - i.e. retail arms, etc.

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Original post by throwawaycon
The data is pretty granular, split into salary bands, so you can see with some detail how many people earn various salaries.


Saw some aggregate data for 2013 for the I-banking business unit:
Total number of high earners: 1813
'Identified staff': 975

High earner is equivalent to those on more than €1mil/year. Only a little over half are material risk takers.

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Original post by Princepieman
Lol, you're still getting these figures from thin air. GHL is £50 + £10 + end of year bonus that's usually slightly above street. Analysts may get say ~10% of their bonus in stock but it doesn't affect them for the most part.

No, it's not mandatory. It's for 'key risktakers', there are 100s of people who fall out of the requirements for submittal of comp. GS pay significantly more on the higher end of the comp scale than you are making out, I feel you're missing a substantial long tail end here..

Well yeah, every bank now defers comp in some way but it still doesn't detract from the fact that GS partners have a specific bonus pool that is incredibly more generous than what's available to standard MDs.

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I have a feeling we are talking about different sources of data. It is a mandatory disclosure under 2008 reporting regulations, the only exception is if it is under £200K.
Original post by throwawaycon
Your source is prior to EU harmonisation. If you check a more recent renumeration report you will see that 2143 of 2429 are identified staff in investment banking. Additionally, the average salary went down with increased identification (both base and variable).

Source:

https://www.eba.europa.eu/documents/10180/1359456/EBA+Op-2016-05++(Report+on+Benchmarking+of+Remuneration+and+High+Earners+2014).pdf


Fair enough, thanks for the update! Average total comp going down is expected if more people qualify as identified staff, looks like the I.S. numbers almost doubled from 2013 to 2014.
Reply 346
Avatar for IB002
IB002
In 2015 GS london has 286 code staff paid over €1 milion. Out of that 11 people probably some PMD made over £14 million at least .
(edited 7 years ago)
Reply 347
Avatar for IB002
IB002
In 2015 GS has 286 people in London paid more than €1 million euro and out of those 11 people ( probably PMD ) were paid more than £14 million at least.
Original post by Princepieman


These figures are about 2 years old (base for graduates a.k.a Analyst 1 is now £50k) but it gives you a ballpark. All-in figures would be base + bonus (i.e. base*(1 + percentage)).

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wait I am slightly confused so the first one analyst one earns 45-48k but 20-70% bonus are we saying they earn 45-48 k then get 20-70% on top of that so say they earn 45k now they get 70% bonus so 31500 bonus so after bonus they earn bonus they make 76500 or are we saying that the 45k includes the bonus so if 70% bonus then their original salary without bonus is £26470.59???

which one is it I am confused.
Original post by Luke7456
wait I am slightly confused so the first one analyst one earns 45-48k but 20-70% bonus are we saying they earn 45-48 k then get 20-70% on top of that so say they earn 45k now they get 70% bonus so 31500 bonus so after bonus they earn bonus they make 76500 or are we saying that the 45k includes the bonus so if 70% bonus then their original salary without bonus is £26470.59???

which one is it I am confused.


Using the example above. Typically as an Analyst 1 today you would get the following:

Basic Salary: £50,000
Signing Bonus: £5,000
Bonus: up to £40,000

So your all-in package would be between £55,000-£95,000. However, given the average bonus is much less than this and normally paid on a pro-rata basis due to you starting mid-year, most first year Analysts take an average of around £72,000 altogether.

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Original post by Commercial Paper
Using the example above. Typically as an Analyst 1 today you would get the following:

Basic Salary: £50,000
Signing Bonus: £5,000
Bonus: up to £40,000

So your all-in package would be between £55,000-£95,000. However, given the average bonus is much less than this and normally paid on a pro-rata basis due to you starting mid-year, most first year Analysts take an average of around £72,000 altogether.

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not bad you can get this straight out of university? I was thinking I didn't want the long hours but considering I probably have like 10 years max I need high income.
Original post by Luke7456
not bad you can get this straight out of university? I was thinking I didn't want the long hours but considering I probably have like 10 years max I need high income.


Yes, that's the average graduate starting package for a front office (IBD/S&T) position at a good bank.

"not bad" - mate, it puts you amongst the top 10% of earners in the UK as a 22 year old haha :biggrin:

Hours are a very personal thing, you'll need to work that out for yourself. Some people find it fine, others don't.

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Original post by Commercial Paper
Yes, that's the average graduate starting package for a front office (IBD/S&T) position at a good bank.

"not bad" - mate, it puts you amongst the top 10% of earners in the UK as a 22 year old haha :biggrin:

Hours are a very personal thing, you'll need to work that out for yourself. Some people find it fine, others don't.

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im not 22
You can make £100000 in your late twenties, not many jobs where you can do that. Although, on an hourly basis you'll be earning less than a McDonald's burger assembler
Original post by Elchapojr
You can make £100000 in your late twenties, not many jobs where you can do that. Although, on an hourly basis you'll be earning less than a McDonald's burger assembler


You can make that in your third year at a bank. And that saying doesn't apply to markets folks.

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Original post by Princepieman
You can make that in your third year at a bank. And that saying doesn't apply to markets folks.

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Yeah true, I just hear it a lot. Third year?? Oh my days, that's huge for a twenty four year old. Even after taxes, that's like triple what my family income is lol
Original post by Elchapojr
Yeah true, I just hear it a lot. Third year?? Oh my days, that's huge for a twenty four year old. Even after taxes, that's like triple what my family income is lol


Yeah. £60k base + £40-70k bonus.
Original post by Princepieman
Yeah. £60k base + £40-70k bonus.


No wonder it's so freaking competitive, gotta have respect for those who've made it and are making a killing
Original post by Elchapojr
Yeah true, I just hear it a lot. Third year?? Oh my days, that's huge for a twenty four year old. Even after taxes, that's like triple what my family income is lol


Same, if I become a banker I dont know what I'm actually gonna do with the money aha
Original post by serions871
Same, if I become a banker I dont know what I'm actually gonna do with the money aha


They probably buy nice cars, and houses in London are really expensive. They probably invest some of it in stuff like rental properties to provide a stable side income, since they could get fired easily

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