Top bankers from target schools earn less. And other banking pay information
Wall Street Oasis (WSO), the investment banking and finance community site has unleashed its compensation survey data for 2014. Based upon thousands of entries from its thousands of registered users, it's about as comprehensive as you can get. It's also sort of surprising. When it comes to banking pay and hedge fund pay, not everything is as straightforward as it seems.
1. As a senior banker, you will still earn more if you don't go to a target school
Last year's WSO pay survey found that bankers earn more if they study at non-target schools than if they study at target schools. This year's pay survey confirms that. However, the non-target schools advantage only really kicks-in once you're a 'manager.' If you're a junior, or an associate, WSO's data suggests you'll get paid more if you went to a non-target school. However, at 'manager level', people from non-target schools earn 17% more.
2. Banking base pay isn't necessarily higher in London than on Wall Street
In theory, you should get a higher salary in London than in New York, because London is ground zero for the European Union's bonus cap and banks in London are increasing salaries to avoid it. In reality, this isn't the case. WSO's data suggests salaries are higher in New York - until you get to VP level, at which point London VPs get $264k and New York VPs get $179k. This makes sense: the EU bonus cap only applies to 'regulated staff', who are typically more senior and the bonus cap only bites at the senior end.
Source: Wall Street Oasis
3. You've only really made it in investment banking when you become a managing director
Witness the chart below.
Source: Wall Street Oasis
4. There's not actually a huge banking pay differential between top performers and the rest
WSO's data also shows that the mean average banking pay is very similar to the median average. This suggests most people are paid by seniority, not by performance after all.
5. Pay for equity researchers is actually pretty good
Equity researchers are paid less than they used to be and they like to complain about it. But equity research pay is actually quite fine compared to other areas of banking. According to WSO, vice presidents in equity research earn an average of $403k, compared to $334k in M&A and $282k in capital markets. Only salespeople and traders earn more ($449k).
6. M&A bankers earn way more in bulge bracket firms
M&A bankers have been quitting for boutiques. In pay terms, that looks like a serious mistake.
M&A compensation, by type of firm ($):
Source: Wall Street Oasis
7. Yes, you'll earn most in London, New York and Hong Kong
No surprises here. Bankers in London and New York earn an average of $107k according to WSO. Bankers in Hong Kong earn an average of $106k. Avoid Toronto and Atlanta, where pay is only $80k and $76k respectively.
8. The bankers who earn the most are not the most intelligent
As the chart below shows, there's no real correlation between how well you did at school and how much you earn in banking. Assuming that doing well at school is indicative of intelligence, this suggests that there's no real correlation between intelligence and banking pay. When it comes to junior associates, it seems that the most stupid earn the most. When it comes to managing directors, it seems that the reasonably bright bankers earn more than the incredibly bright ones.
Source: Wall Street Oasis
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5 reasons why you should switch your career in finance to asset management, immediately
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