Investment Banking Job Growth

Investment Banking Job Growth – Investment Banker Average Salary $162,715 To create salary estimates, we start with data published in publicly available sources such as the US Bureau of Labor Statistics (BLS), Foreign Labor Certification Data Center (FLC) Show more

The average salary for an investment banker in the United States is $162,715. Salaries for investment bankers typically range from $95,000 to $276,000 per year. The average hourly wage for investment bankers is $78.23 per hour. Investment banker salary is influenced by location, education and experience. Investment bankers earn the highest average salaries in Alaska, Vermont, Maine, New Hampshire and Massachusetts.

Investment Banking Job Growth

Investment Banking Job Growth

Average salary for investment bankers in Alaska, Vermont and Maine is the highest in the US. Utah, Missouri and Nebraska have the lowest average salary for investment bankers.

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Investment bankers at Citi and Babcock & Brown have the highest salaries, according to our latest salary estimates. Additionally, the average accountant salary at companies such as Credit Suisse and Radius Health Inc is very competitive.

Alaska pays investment bankers the most in the U.S., with an average salary of $188, $763 a year or $90.75 an hour.

You will know if you are being paid fairly as an investment banker if your salary is close to the average salary in your country of residence. For example, if you live in Vermont, you’d pay nearly $164,538 a year.

Investment bankers have 10-20 vacation days a year. This is roughly the same as the national average for all occupations in the United States. The number of vacation days can be affected by seniority, company size and performance. If you’re new here, click here to get my FREE 57-page Investment Banking Recruiting Guide – plus weekly updates to get you started in investment banking. Thanks for visiting!

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If you want to know how investment banker salaries and bonuses are trending, see compensation discussion and news.

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If you see stories about “huge bonuses” or “Wall Street greed,” you know it’s been a good year for bankers.

And when most of the stories involve layoffs or people pushing back on their planned retirement, you know things are bad.

Investment Banking Job Growth

NOTE. All numbers are pre-tax for front office roles based in New York and include base salary and year-end bonuses, but not signing/relocation bonuses, severance bonuses, benefits, etc.

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The basic salaries remained mostly the same, but the total remuneration decreased by ~15% to ~50% depending on your level.

As I predicted in my last update, banks used COVID and the resulting disruption, inflation and panic as an excuse to raise base wages while cutting bonuses.

But that’s wrong because banks base total compensation on a percentage of revenue, and last year’s revenue was down due to weaker trading activity:

It’s easy to interpret much lower bonuses and trading activity as terrible news, but I’d like to point out the following:

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1) Back to normal – M&A activity in 2022 represented mostly a return to “2016-2019 normal” after a very bloated 2021. Refinitiv has a good chart:

2) Hours / Lifestyle – Yes, trading activity was much lower, but the average number of hours worked was also lower. Of course, bankers always exaggerate their hours, but several associates and above worked 50-60 hours a week and earned $300-400,000 in total compensation.

3) Distribution of Bonuses – While bonuses generally declined, CEOs took a hit. Their compensation is always most closely tied to transactional activity, so it’s no surprise that it’s down nearly 50% this year.

Investment Banking Job Growth

IMPORTANT NOTE. The above analyst estimates are speculative as most banks have returned to paying analyst bonuses in the middle of the calendar year.

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So I’m extrapolating the mid-2022 numbers and some of the remaining banks paying analysts at the end of the year.

Overall, analyst compensation wasn’t terrible – ~15% by my estimate, but the 2021 base salary increase contributed to this not-so-bad decline.

Year-end bonuses for the few banks that still paid analysts at the end of the year seemed to be 30-50% of base salary.

We’ll see the full numbers in the middle of this year, but I wouldn’t be surprised if some of these companies pay bonuses well over 50% of base salary.

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But if you’re a mid-market or inflated market bank, I don’t see total compensation exceeding $200,000 unless there’s a huge increase in transaction activity in the coming months.

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Base salaries are still moving from $175,000 to $225,000 at most companies, so smaller bonuses explain most of that.

To provide an overview of total compensation at all levels of the major banks, taking into account transaction flow and sequence/outcome differences:

Investment Banking Job Growth

Interestingly, some EB banks reached these numbers with a higher than usual basic salary and others with a higher than usual bonus.

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Elite boutiques pay on the higher end, with many BBs in the $500-$600,000 range and some EBs closer to $700,000.

I have next to no data on this, but if many MDs were down 50%, directors would probably be at least ~30%.

That still adds up to a lot of money (six figures on average), but it’s also a significant drop from last year, when some directors topped $1 million.

As mentioned above, MDs got one for the team this year and saw the biggest drop in banker compensation.

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In previous years, I’ve quoted ranges like $1-2M or even $1-3M for total MD compensation, but this year a large number of MDs made less than $1M.

“On average, CEOs of banks such as Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. their total compensation has declined by 40% to 50%, with top executive payouts falling from $800,000 to $1.5 million and first-year director payouts from $600,000 to $1 million. “.

The Arkesden and Dartmouth Benefit Reports are good sources for London data. Unfortunately, I couldn’t find anything new about this year’s numbers.

Investment Banking Job Growth

However, I assume the usual 30% London discount still applies, so you can reduce the above levels by 30% and convert to GBP to get the numbers.

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These numbers are small – as US affiliates can clearly earn more than $350,000.

Seems well researched, but it also suggests that wages are much lower in Asia (likely) or that US bankers are just lying about their bonuses (also possible).

These results are a good reminder that bonuses are much less predictable than most people think, especially in a volatile macroeconomic environment.

Many people currently in the financial sector joined during the relatively quiet period of 2010-2019.

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Trading activity and compensation increased modestly in most years, and so-called shock events such as Trump and Brexit were the most significant in 2020-2022. quite mild compared to the events of the year.

Going forward, I expect benefits to continue to fluctuate significantly from year to year, so you should expect less of a “straight line” in your career and earnings.

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I want to close by discussing a specific goal/dream: Many people plan to continue their path in the financial industry and “retire early” in their 40s with a net worth of $10+ million.

Investment Banking Job Growth

When you factor in the total number of benefits above, tax and cost of living, you can see that this is quite difficult to achieve in places like New York and London.

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If you also assume you saved $1 million before becoming an MD and earn 5% a year on your savings, you could end up with about $5 million in ten years.

At a 10% return, that turns into just over $7 million, and if you save more than $500,000 a year, it’s more than $8 million, even at 5% annual income.

But my point is that getting to $10M (or more) is less “certain” than you think, especially since MD’s turnover is quite high.

Few people start at 22 and work continuously in the industry for 18 years. they may get an MBA, quit their job, or take another job in the meantime.

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If you want to reach this level faster or accumulate much more wealth from it, you need a combination of:

On the other hand, you will probably become a multi-millionaire if you stay in the industry for a moderate amount of time, which can be quite good for you.

It might not be “retirement forever” money, but he could easily “quit and do something more interesting.”

Investment Banking Job Growth

Brian DeChesare is the founder of Mergers & Inquisitions and Breaking Into Wall Street. In his free time, he enjoys lifting weights, running, traveling, watching TV, and defeating Sauron.

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