Pity the lowly mergers and acquisitions (M&A) banker, for he or she not only works stupidly long hours in the service of capricious clients, but brings in very low revenues for his/her bank in the process.
We know this because banking intelligence firm Tricumen has issued some new research on revenues per head by banking business division for the first quarter of 2013. We've published the full hierarchy below. M&A bankers come last. Credit traders and salespeople come first. If revenue per head were a measure of bankers' beauty, the M&A banker might rank somewhere alongside Anne of Cleves, the fourth wife of Henry VIII who was deemed so unattractive that Henry was unable to consummate the marriage. Credit trades and salespeople would be up there with the beautiful Anne Boleyn.
Revenue per head matters in banking because it's often a proxy for pay. Across the bank as a whole, most banks restrict compensation to 45% or less of revenues (eg. Goldman Sachs went for 43% in the first quarter). This being the case, Tricumen's figures suggest that M&A bankers should each be earning an average of $135k while credit traders should command an average of $1m.
Obviously, it's not as simple as this: there's also the issue of capital requirements and the fact that fixed income traders have the potential to bring down entire banks, while M&A bankers are simply prone to running up huge lunch bills, but still...
Next time M&A bankers complain about poor pay, someone may want to point them in the direction of this page.
The banking job productivity hierarchy (measured in terms of revenues per head, Q1 2013)
1. Credit sales and trading: $2.3m
2. Equity capital markets: $2.2m
3. FX sales and trading: $1.5m
4. Rates sales and trading: $1.2m
5. Equity derivatives and convertibles: $1.1m
6. DCM and Securitization: $1.0m
7. Commodities sales and trading: $0.9m
8. Prime services: $0.8m
9. Cash equities sales and trading: $0.5m
10. M&A and advisory: $0.3m