Despite a hazy economic picture and a sub-prime housing sector that's causing a stir, the investment banking job market - and its pay - continues to be strong.
Recruiters say both bulge bracket firms and middle market players are still pressed to find skilled professionals. A critical need for executive talent is causing a run-up in base compensation at the higher levels of power, says Scott Grossman, president of Dynamics Associates, a New York executive search firm catering to the financial services industry. In addition, bulge bracket firms are poaching key players from one another. "Now, the companies really are working harder to keep people around, simply because there is a lack of good people out there," he says.
The need remains broad-based: Firms need people to work both on the investment banking side and behind the scenes in the back office. "They're looking for people with good finance and business solutions skills, as well as people on the operations, risk, compliance, and trading end of it all," says Grossman.
From the job seeker's perspective, Grossman sees a subtle but notable change: "In the interest of costs, (banks are) doing even more hiring directly."
According to PayScale.com, the U.S. average annual compensation for a director of investment banking is $412,000. In the New York City area, average annual compensation for the role is slightly higher at $452,000. (These figures don't include equity compensation.)
The pattern holds in other positions: Pay is good across the country, but better in New York. Average annual compensation for a U.S. managing director of private equity investments is $338,000, PayScale.com says, though again New York-based MDs are earning an average of $600,000. Vice presidents are earning an average $291,000, while those in New York garner an average $343,000. Senior associates across the country receive $175,000, and those in the Big Apple earn $220,000. Investment banking analysts in the U.S. are earning an average $138,000, while in New York they're receiving $230,000.
About half the people working in these roles are working in New York City, PayScale.com says.