If the big takeaway from Wall Street Oasis’ 2022 Consulting Industry Report was that there are great consultancy careers to be made outside the MBB (McKinsey, Bain and BCG), the takeaway from the Investment Banking Industry Report is this: You can have a truly astronomical salary as a new investment banker, or you can have a manageable work-life balance. It’s increasingly hard to have both.
Data from WSO’s 2022 Investment Banking Industry Report, reported by employees actually working in the field, shows that while salaries are rising a couple of years into the pandemic, the working hours required to get those high salaries are also through the roof.
Investment banks are having a harder time holding on to analysts who often work 80 or more hours a week at some places. That attrition problem has forced the banks to compete with consulting firms for interns and first year analysts, driving up salaries at consulting firms, and driving them up even more so for starting bankers, Patrick Curtis, founder and CEO of Wall Street Oasis, tells Poets&Quants.
“It’s a work-life balance thing, and it’s a new generation thing where younger people actually value that more. It’s one thing to hear you’re going to work 80 to 90 hours per week, it’s another to live it,” Curtis says. “The banks are losing a lot of kids even after that first bonus cycle, and private equity firms are more than happy to snatch up good talent early on. People are even joining startups, or working in corporate development or corporate finance.”
WSO is an online community, news site, and career center for people working and aspiring to work in finance related fields. It has almost 900,000 registered users who report a trove of data on the companies where they work. WSO’s 2022 Investment Banking Industry Report takes this user-reported data to provide insight into nearly 20 different metrics job hunters would be strapped to find anywhere else: How many hours employees work per week, for example, or the percentage of interns who are offered full-time jobs.
WSO’s reports are constantly changing based on new information users report to the WSO Company Database which includes more than 50,000 submissions across thousands of companies. The report we are looking at today is up-to-date as of this month and includes year-to-date data as well as data for the prior two years. Because of this, some of the latest trends reported by users won’t start showing up until later reports. (WSO uses Bayesian statistics to create percentiles for companies with few observations.)
Read more about WSO’s report methodology here.
WHICH INVESTMENTS BANKS PAY THE MOST?
For those chasing the highest paycheck, the salaries and the bulge brackets are indeed eye popping.
Since 2018, compensation has soared at 10 bulge banks: Bank of America Merrill Lynch, Goldman Sachs, Barclays Capital, Credit Suisse, Deutsche Bank, JPMorgan Chase, Citigroup, Morgan Stanley, and UBS. For first-year analysts, average compensation (salary plus bonus) has gone from $125,000 in 2019 to $142,000 in 2022, a nearly 14% increase. You can see the comparative salary trends in the two charts below, 2018’s on top, 2022’s below.
Of the 10 bulge bracket banks, Credit Suisse had the highest competition, according to WSO’s user-reported data. Starting base salary for the firm’s summer analysts is $104.7K with a $9.8K signing bonus. Summer associates make an average of $153K with an average bonus of $21.6K. The one reporting Vice President brought home $350K in salary along with a $100K bonus.
On the other end of the spectrum, UBS AG paid the lowest average salaries starting at $68,500 for summer analysts (with a $2,000 bonus) and rising to $195,000 for vice presidents (with a $70,000 bonus).
WSO’s data dives much deeper, and you can break its pay data down by sex and race, to see which firms live up to their DEI mantras. Find the full compensation data here.
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