Soon all VPs will be paid like they're at Goldman Sachs
If any hierarchical cohort has done well out of the recent pay round, it would appear to be VPs.
Neglected in 2009, VPs have - according to headhunters - been stroked gently in 2010. This pleasant treatment allegedly comes at the expense of MDs.
Alleged evidence of favouritism
VP's popularity is evinced by the fact that they've allegedly had a 20% salary increase at BarCap, that their salaries are allegedly under review at BAML and that (very, very allegedly), the size of the partnership pool was trimmed to allow a broader distribution of the spoils at Goldman (although any partner pain also appears to have been mitigated by the fact that salaries for Goldman partners were hiked substantially).
VP salaries circa 2010
As we said before Christmas, the average VP salary is now around 130k.
However, VP salaries at Goldman are said to be much higher, at anything up to 200k. Other banks are therefore said to be keen to catch up.
The impetus for the increase
The rationale for this recalibration is apparently the financial crisis. Since 2007, banks have recruited fewer analysts and associates than they did previously. Incipient VPs are therefore rare.
"There are fewer people coming through the ranks," contemplates one corporate finance headhunter. "There's not a large pool of associates to promote like there used to be, so there's more emphasis on retention."
On top of this, the FSA's 500k rule, which exempts people from restrictions on bonuses if they're earning less than 500k and if less than a third of this is bonus, has the potential to increase salaries substantially at VP level.
On the whole, however, it's not just salaries but total compensation which seem pleasing for VPs.
"Most VPs have been paid level with last year," says the head of one fixed income search firm, "whereas most MDs - unless they made big money - have been paid down."
The exception to this appears to be UBS, where a nest of disgruntled VPs with zero bonuses is said to have formed.
