Morning Coffee: J.P. Morgan wants to make you MD at 29. Big bonuses at UBS
There are good reasons to become a managing director in an investment bank: the salary and the bonus. As a managing director at an investment bank in London, you can expect a salary of £350k to £550k ($500k to $780k), or more. And you can expect a bonus that's up to twice that again.
Making MD in banking takes time, however. Our research suggests the average finance professional spends 17.5 years working in the industry before becoming a managing director. Assuming you leave university at 21, that means you'll be pushing 38 before the big promotion comes. Unless, that is, you work at J.P. Morgan.
As part of a new package of measures designed to keep employees happy, J.P. Morgan is reportedly fast tracking MD promotions for its highest performers. Henceforth, the Wall Street Journal reports that people with an 'E' rating (for exceeds expectations) will have the potential to make MD in as little as 8.5 years. The bank's best and brightest will now get to spend just two years as analysts, just two and a half years as associates, two years as vice presidents and two years as executive directors. If all goes to plan, they could reach the top before they reach 30.
Not only that, but they may not be worked to death in the process. J.P. Morgan has also introduced an initiative called, "Pencils down", whereby investment bankers at all levels are being encouraged to stop working at weekends - unless they're working on live deals. Unfortunately, it's to be expected that M&A bankers, who typically work on three or more deals at once, will have at least one live one in their repertoire. As Goldman's ex-global head of M&A explained this week, M&A is a job that you, "do every day, every night, and often through the weekend." Downing pencils may not change that.
Separately, while people at Citi and Morgan Stanley are said to be bemoaning their small bonuses, people at UBS seemingly have much to look forward to. Speaking at Davos, Andrea Orcel said UBS's investment bank employees can look forward to a "solid" year for compensation. Expectations should be raised accordingly.
Barclays says its investment bank revenues for 2015 were pretty similar to 2014. (Bloomberg)
Barclays is mostly cutting VPs and directors. (Dealbreaker)
Two years ago, SocGen launched its US mortgage backed bond desk. Now it's closing that. (Bloomberg)
Goldman Sachs is heavily into artificial intelligence. (Business Insider)
Upset as it becomes apparent that juniors have no knowledge of the bank's integrity message. (BloombergView)
Data shows big private equity deals were more driven by "ego than common sense". (Bloomberg)
You don't want to work in asset management. (WSJ)
You do want to work for an M&A boutique. (WSJ)
Caius Capital: hot new hedge fund. (Reuters)
Jamie Dimon got a 35% pay rise. (Business Insider)
Steve Cohen is no longer a mean man in a fleece. These days, he likes to hang out, share experiences with the youth (who are managing his money). (Alphaville)
Rise up against workplace surveillance in all its guises. (Stumbling and Mumbling)
Photo credit: Suit, thinking things through on the Northern Line. by Steven Shingler is licensed under CC BY 2.0.