Dartmouth Partners 2014 Analyst Bonus Survey: Bonuses Increase for IBD Juniors
Junior M&A bankers, always well paid, are being paid even more than before. The latest analyst bonus survey from London-based recruitment firm Dartmouth Partners reveals that M&A juniors have benefited from bonus increases in the range of 7% to 23%. Three years out of university, M&A juniors ('third year analysts') can now expect to earn £102k in total compensation.
The full figures from Dartmouth are as follows:
Analyst one, mean salary and bonus:
Salary: £45k (same as last year).
Bonus: £27k (up from £22k last year).
Total compensation: £72k (up from £67k last year= an increase of 7%.).
Analyst two, mean salary and bonus:
Salary: £50k (down from £51k last year).
Bonus: £38k (up from £32k last year).
Total compensation: £88k (up from £83k last year= an increase of 6%).
Analyst three, mean salary and bonus:
Salary: £57k (same as last year).
Bonus: £45k (up from £42k last year).
Total compensation: £102k (up from £99k last year= an increase of 3%).
Analyst pay increases: salaries rather than bonuses?
The Wall Street Journal reported that banks were increasing salaries for junior staff in August and headhunters in London tell us that Morgan Stanley has recently increased salaries for associates and vice presidents.
However, Dartmouth's figures suggest that analyst pay increases in IBD have come in the form of higher bonuses rather than higher salaries. Notably, the pay increases have been proportionately higher at the junior end. Banks have been struggling to increase junior headcount to cope with higher deal volume and a commitment to reduce analysts' working hours.
Logan Naidu, Dartmouth CEO, says demand for IBD analysts remains robust. "Hiring managers are working harder to attract people and willing to take more risks. Offers, counter offers and buybacks have increased," he says. At the same time, Naidu says the pool of available analysts is being drained by people leaving for private equity, hedge funds and tech companies near London's so-called 'Silicon Roundabout.'
"There's certainly no wage deflation for junior bankers," he concludes. "The hours may be long, but people feel they've been well paid."