So what are the total salaries like?

I don't think he's messing around. I've attached a comp chart for IB that was published last year in the NY Post. On this chart, class of '05 would be considered 1st year associates. In banking terminology, the first 6 months after you graduate are known as the stub year or stump year, and you get a fixed bonus a the end of the year. The total compensation numbers listed in the table are for the first full year, and thereafter. As you can see, first year comp ranged from 250k-350k. Last year was a really good year for investment bank, but bonus levels are supposed to be about the same at most places this year. These figures are for bulge bracket banks, but the smaller banks tend to pay similar amounts during the early years.

So, if you're going to Ross, you should have a very legitimate shot at an IB job. As a rule of thumb, about 1/3 of the people at elite schools go into banking, and about 1/3 go into consulting. I believe consulting is more popular at Ross, but you'll definitely have access to most of the banking jobs. Compensation for consulting is less than it is for banking, but you have the chance of 2nd year tuition reimbursement.

I'll put it this way, people going into banking right now will be pretty angry if they don't get paid 250k. There was another thread in the b-school applications forum discussing this topic; I think it was about a month ago.

do you think salaries will be like that, even with all of them taking a bath over the subprime debacle?

Its sort of true. In IB, $250K first year is reasonable. But, probably only in IB. Mind you, there's a reason they pay like that. You kill yourself with the hours. Some people thrive in that environment, but most who just think they can "take it", usually can't.

Firms recently started reporting bonus numbers and comp this year will be pretty similar to last year in most cases. Most firms were on record pace for the first part of the year, and did well enough overall that most divisions actually had record years. Certainly, some divisions went in the crapper, and people in those divisions will feel lucky if they keep their jobs, but most banking divisions are still highly profitable. Also, there are obviously a few firms where bonus numbers will be cut, but if a bank seriously cuts its bonus it's really a soft way of asking people to leave. Any bank that wants to keep people around must pay market level bonuses. My sense is that compensation will probably be down for the coming year because the economy is weak right now, and even if things turn around mid-year, firm profitability for the year (which is what bonuses are largely based on) will probably be lower.

The thing to remember is that current 1st years graduating in 2009 really need to concern themselves with how the economy is doing in 2010 (because the stump year bonus for the remainder of 2009 will be a fixed amount). I don't think anybody can really predict what things will be like at that point and the economy could be bustling again; but I do know that bankers will probably be paid more than those in other MBA professions (this is generally true during boom or bust).

Rhyme is right, the hours can be crushing and a lot of people simply cannot take it. I will say that after spending literally hundreds of hours in the fall getting to know various firms, I have noticed that there are substantial differences between firms regarding work load, pressure and respect for your time.

Pelihu,

I am interested in your last statement. I have always heard IBers work consistent 100 hour weeks. You mention you think there is a lot of variation in this? Is this geographically correlated? Or bank correlated (I realize bugle-bracket probably demand a lot more time). Is it true that non-bulge bracket banks typically pay far less on the bonus scale?

Very curious about the profession (as I am assume a lot of MBA aspirants are) and seems you have a lot of knowledge on the subject.

Thanks!

~Sam

Just to say, that money isn`t always the main motivating factor.

For example, the UK IT contract market is highly lucrative. Rates range from 30 GBP -> 100 GBP per hour depending on your skill set. That equates to $120k -> $400k and because its per hour, any overtime is paid.
I have quite a few friends who do this, and i was doing this sort of thing when i first moved to Japan. In fact if you get an permanent IT Job in the UK, you will not find many British people working as permanent employees. Most of them are contractors and the permanent roles are filled by non-British (Permanent roles do not pay as much)

I'm going to first disclose that I have never worked as a banker personally. As a lawyer I worked closely with bankers, and I've gotten to know dozens and dozens (perhaps hundreds) of bankers over the course of this fall. I believe that the rumored consistent 100 hour weeks are a falsehood - in fact several bankers I've met laugh at this. I believe it's possible that some first-year analysts might work close to 100 hours per week on a regular basis, but even that is rare. As an average, I'd say that 70 hours a week is a more honest number for new associates. I've been gathering data on this through conversations with people at lots of banks, and I'd say an average day starts at 9-9:30 and ends at 9-10, for about 12 hours per day. That means about 60 hours during the weekdays, and in the early years most people put in say 12-15 hours each weekend. That adds up to about 72 or 75 hours, which is a far cry from 100. There's no doubt that all-nighters and 100 hour weeks happen from time to time, but 70-80 is a more honest number - and trust me it can be a crushing load.

As far as variation, a lot of things you brought up could make a difference. People at bulge-bracket banks tend to work a little hard; I think a lot of MDs at middle market banks moved over from larger banks to get a better quality of life, and that attitude tends to trickle down a little. Geography does make a difference. I believe people in New York work harder by nature and you will work less in most other locations around the US. I think a lot depends on how busy your group is and how the overall economy is doing. There are also a lot of differences between firms at the margins. People at some firms are allowed to put in weekend hours from home - which makes a huge difference. We had our week on Wall Street right before Christmas and there was a definite difference between firms with how people were able to plan their weekends. Some were wrapping things up before the break, while others were concerned they wouldn't be able to get away - that can make a huge difference. So, when you start learning about firms, try to notice the small differences. When you are working that many hours, small changes at the margins make a huge difference.

I'm a former IB analyst and I can attest that 100-hr. weeks happen maybe twice a year, at least in fixed income.

Most associates at my bank (non-US, NY office) worked anywhere from 8 to 21 hrs. a day depending upon deal flow - the average work week, even in New York, is between 65-80 hours.

The traders are the only ones who get away with 45 hour weeks and still make a bundle.

Thanks much for the replies...

Truth to the fact that while traders only work 45, they carry a lot more stress and have a lot less job security?

Thanks!

~Sam

No personal experience in banking but I do have some family that work/ed in it and have tried to convince me to head there. I guess hours can vary greatly by what group you are on, what deals you have going, and another factor is who is your boss. My uncle who is now retired but was very senior at a bulge bracket bank said when he was in charge, to help with the stress and hours he encouraged breaks to go to the gym (he is an exercise nut). Obviously this was dependent on what was going on at the time but what he dealt with wasnt tied to the markets so there was a lot more freedom with hours. He said a typical day would start around 9 and he would be home in time for dinner most days (7-8ish) with an hour plus lunch/gym break in there. He said his group typically had high performance, was desireable to work at, and strong retention because of the quality of the work environment compared to some of the areas where people burn out quick. That said, he did warn that in all areas there were times when hours were drastically more but also times when you would work 45hr weeks. Vacations timed properly would let you enjoy yourself without interuption, go on vacation during a busy time and you may spend the whole time with a cell phone pressed to your ear.

It has been recommended that if you want banking do everything in your power to work in IM. Hours are a lot better, pay at many companies may not match what some areas in IB pay but the work life balance is far better. One person I talked to is attending school right now, left a VP position at a bulge bracket bank and is expecting to take a pay cut post grad but is willing to do so to get into a position that doesnt require the 70+ work weeks. Its what you want to do, max pay check will require max hours generally...you can find positions that will pay well but not on the extreme high end that have much more tolerable hours.

I think this has been discussed elsewhere, one potential problem with IM is that the career path is not very well defined. With IB, most of the people who put in the work and want to hang around for 6-7 years make the transition from associate to VP smoothly after 3 years (if the economy is reasonably good of course). With IM, I've heard that the organization structure is like an hourglass, lots of people at the lower levels, very few people in the mid-levels, and then more people at the top levels.

The beauty of IM is that you don't really need any more manpower to manage bigger portfolios. IM funds typically need lots of associates/analysts to do the research work, but there's really not much reason to promote these people and pay them more as they progress in their careers. The typical career in IM would be to cut your teeth at a big fund, and then at some point go off on your own and start a new fund. You kind of have to move yourself from the lower levels to the higher levels. It's great for those that are successful, but I think it's less certain that 5 years after graduation what role you'll be in.

Hours in IM will almost certainly be better than IB. I think what you'll find as a first year student is that it will test your nerve if you want to go for IM. The reason is that IM firms (and hedge funds etc.) all recruit later, and in a more ad-hoc basis. You'll have to forego IB recruiting to go after the IM jobs. I personally got an invite from a big hedge fund and one from a big IM firm and dropped both because I received great IB offers, and I'm too risk averse to wait around. I also think that some IM jobs are particularly vulnerable to changes in the economy; anyone younger associates at PE funds are sweating it out right now because no deals will be done for the foreseeable future; of course people at Citi aren't sitting easy either.

What is the avg. salary in IM usually around? Are most of these jobs NY based or spread out?

Thanks for your answers, these are extremely helpful, and much more personal than searching Princeton Review Thanks again!

~Sam

Most buy-side (IM included) jobs are spread all over. It's quite possible to have a great buy-side job even in places like Evanston, Boston, Connecticut, NorCal etc.

However, the bar for entry is set a lot higher than IB. In fact, I'd venture and say it's easier to get a sell-side job in IB than it is to get a buy-side job.

VP's in some of the more well known buy-side shops make 500k plus, while Portfolio Managers would easily reach 750k to 1mm+. I'm sure that varies a lot since IM and buy-side jobs in general cover a really wide spectrum of what's out there.

Is it a common path to start in IB and transition into IM buy-side?

Also, I have heard many people wanting to transition into VC from IB, is the reason for this mostly quality of life related? Or more monetary?

Thanks again! I am enjoying this thread!

~Sam

LOL. 120 hour weeks I heard from so many IB people.


So during these 70-80 hour weeks, are people working straight?... or just messing around for a while?

Yes, it's pretty common these days. In fact, the traditional analyst career progression track in New York is rapidly turning into 2 years IB + 2 years buy-side followed by MBA.

Folks in equities may work more hours. We fixed income folks are generally mellower and saner than our equities counterparts

So will companies try to gip you... for instance during negotiations you quote the average salary for IB employees in the New York office, but you are intervewing for the position in say Dallas and they say that cost of living in Dallas is cheaper, so they pay you less....


Doesn't sound fair, but I can see companies playing this angle....