Relative to the hours they put in, M&A analysts in investment banks are underpaid. They may seem perfectly happy to keep slogging away, but according to figures from compensation benchmarking company Emolument they get paid $26 an hour - and that's for a lot of nights.
If M&A juniors are comparatively underpaid, who's overpaid relative to the effort they put in? And who else needs a top-up? Arguably everyone on Wall Street is overpaid compared to the country at large, but some people have to work harder for their money than others. We asked some search consultants. This was their verdict.
1. Overpaid: Senior wealth Managers
Senior wealth manager compensation: "Well into seven figures"
Senior wealth managers can earn "well into seven figures," says Adam Zoia, chief executive of search firm Glocap. Nor do they have to bust their digestive systems to get this money: once you've built a book of assets under management in wealth management, Zoia says life becomes pretty easy.
"Once wealth managers have built a book of business they get an annuity," says Zoia. "Wealth management is a long term business and it's slower-paced than investment banking advisory businesses, which are more transactional. A lot of wealth managers have very nice lifestyles and earn a good amount of money. They'd argue that it's hard to build the book of business in the first place, but there are few sales jobs where you keep on getting paid for something you sold a while ago."
2. Overpaid: Hedge funds' execution traders
Execution trader compensation: $150k
As we noted a few weeks ago, hedge funds' execution traders are also handsomely paid for not much at all. While some pride themselves on their expertise on market timing and algorithm awareness, others pretty much press a button upon command. “It’s not bad pay for an admin role," said Chris Apostolou at Arbitrage Search and Selection.
3. Overpaid: Senior salespeople at big name banks
Salesperson compensation: $300k-$500k
Senior salespeople at big banks like JPMorgan or Goldman Sachs can take home anything from $300k-500k according to Zaheer Ebrahim at search firm Kennedy Associates. This isn't bad given that much of the selling is performed by the pure power of the franchise. "When you're at an established house, sales can be a pretty easy job," says Ebrahim. "The name speaks for itself."
"Senior salespeople at big banks get too much benefit from the firm's relationship with the client - many institutions feel they have to deal with certain banks because they want access to the IPO calendar, or liquidity, or prime broking. The salespeople can just ride on the back of that," says Christopher Wheeler, a director at Mediobanca in London. However, he also says that sales can be a very stressful role and that salespeople need to be very self-motivated.
4. (Comparatively) underpaid: Equity research jobs in investment banks
Equity research compensation: Very rarely more than $500k, often a lot less
$500k might sound like a serious amount for a senior equity researcher, but there was a time when they were paid $1m+. As equities commissions have been squeezed, however, so has pay for equity researchers. At the same time, their workload has increased to include a lot more in the way of client marketing and so-called 'client access' (introducing investors to company management.')
"Hour for hour, the equity research puts in a lot more effort and gets paid a lot less than the salesman in a bank," says Wheeler.
5. (Comparatively) underpaid: Technology jobs in investment banks
Technologists' compensation: Rarely more than $250k for juniors
Michael Karp, managing partners of search firm Options Group, says technologists are shaping up as one of the insufficiently-rewarded groups on Wall Street. Technologists are paid less than traders even when they work very closely together on electronic trading systems, says Karp. He predicts that banks will need to increase pay for their tech staff: "Companies like Facebook and Google are paying $250k+ for technologists right out of college - we've lost several of the people we've been placing in banks to higher paying technology companies."