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Wall Street Bank Bumps First-Year Pay By 30% To Attract New Grads

In recent years, Wall Street has seemed to lose its lure among MBA grads.

A decade ago, nearly 20% of MBAs from the University of Pennsylvania’s Wharton School went into banking. In 2020, only 12% of Wharton MBAs pursued full-time investment banking roles. Moreover, data shows that in 2020 only 7% of graduates from the top five U.S. B-schools went into full-time investment banking roles – a roughly two point decrease from the 9% in 2016.

Many MBAs highlight the long hours and poor work life balance as key reasons to stay away from the investment banking industry. Now, banks such as JPMorgan and Goldman Sachs are offering pay raises for junior bankers, with some bumps as high as 30%, as a means to attract new grads.


At JPMorgan, first-year sales, trading, and research analysts will be paid $100,000—an increase from the previous $85,000, Bloomberg reports. The bank will also increase pay for second-year analysts from $90,000 to $105,000 with third-year analysts’ pay increasing from $95,000 to $110,000.

At Goldman Sachs, first-year analysts will get a base pay of $110,000—a nearly 30% increase from the original starting salary of $85,000, according to MarketWatch.

“There’s a lot of poaching going from the banks at the moment,” Jason Kennedy, chief executive officer of recruiting firm Kennedy Group, tells Bloomberg. “Some of the better banks are losing staff to the buy side. So then they’re going to their competitors and poaching from them. It’s becoming a vicious circle.”

Earlier this summer, a number of banking firms, including Morgan Stanley, Barclays Plc, Citigroup Inc. and Deutsche Bank AG, raised first-year pay to $100,000 – a number that experts say will likely be increased even further now through bonuses as a means to stay attractive to new grads, according to Bloomberg.

Still, many MBAs say that the long hours that come with investment banking simply are not worth it.

“You don’t have control of your lifestyle, and you’re working even when you don’t want to,” Ben Chon, a 27-year-old entrepreneur who left his job as a health care banker in JPMorgan Chase’s San Francisco office, tells The New York Times

Sources: Bloomberg, Financial News, The New York Times, MarketWatch

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