by Brian DeChesare Comments (25)

Investment Banker Salary and Bonus Report: 2022 Update

Investment Banker Salary

I did not expect to revisit investment banker salary and bonus data for a while, but the banks ruined my plans by changing base salaries multiple times in less than a year.

Unfortunately, that has made it difficult to determine the “average ranges.”

As a result, I am listing below the new base salary ranges for U.S.-based roles at large banks as of early 2022, along with total compensation from 2021.

This is slightly confusing/inconsistent, but I don’t believe that total compensation will change much with these new, higher base salaries (see below), so I’m sticking with this method:

Position TitleTypical Age RangeBase Salary (USD)Total Compensation (USD)Timeframe for Promotion
Analyst22-27$100-$125K$150-$250K2-3 years
Associate25-35$175-$225K$300-$550K3-4 years
Vice President (VP)28-40$250-$300K$500-$900K3-4 years
Director / Senior Vice President (SVP)32-45$300-$350K$800-$1,200K2-3 years
Managing Director (MD)35-50$400-$600K$1,000-$3,000K+N/A

NOTE: All numbers are pre-tax and include base salaries and year-end bonuses, but not signing/relocation bonuses, stub bonuses, benefits, etc.

Yes, these are substantial pay increases for most levels.

But the ranges are also much wider now.

Before you leave an angry comment to say that you or your friend earned above or below these numbers, I want to offer a quick explanation:

Investment Banker Salary Changes vs. 2021 and 2020

I am giving very wide ranges for the compensation here because:

  1. Midway through 2021, banks increased base salaries for Analysts from $85K – $95K to $100K – $110K. And then, in January 2022, many banks increased Analyst base salaries again so that 1st Years earn $110K and 2nd Years earn $125K.
  2. Meanwhile, banks increased the base salary progression for Associates from $150K – $200K to $175K – $225K.
  3. And then various banks also increased base salaries for VPs, Directors, and even MDs.
  4. Finally, different banks paid very different bonuses over the past 12 months, even to “top performers” at the same level. More on this below.

Here’s an example of the specific problem that all these factors create.

Let’s say that a Year 1 Analyst in 2021 reported a bonus of $80K.

This Year 1 Analyst was on an $85k base salary in the first half of 2021, but banks raised this to $100K in the second half of this year.

At the same time, this person became a Year 2 Analyst, which meant a new base salary of $105K.

But in January 2022, banks increased base salaries to $110K for Year 1 Analysts and $125K for Year 2 Analysts, so this person might now be on a $125K base salary.

So, what is his total compensation for “the past year”?

Is it $80K + $85K = $165K?

How about $80K + $85K * 0.5 + $100K * 0.5 = $172.5K?

Or is it $80K + $100K = $180K?

Or should we go with $80K + $110K = $190K?

I lean toward the first two numbers because, in all likelihood, banks will reduce bonuses due to these higher base salaries.

Here are the average percentage increases for total compensation over the past 1-2 years:

  • Analysts: 20-25%
  • Associates: 20-25%
  • VPs: 25-30%
  • Directors: 25-30%
  • MDs: N/A (too difficult to determine a single “average”)

At first glance, these seem like impressive increases.

But the true inflation rate is likely at 10-20%, and global investment banking fees were up by even higher percentages!

What Happened to Investment Banking Fees?

After an initial slowdown when the pandemic first struck in early 2020, banks have generated record-high fees from M&A and capital markets deals.

Here’s 2021 global investment banking revenue by region, with percentage increases over 2020 noted:

2021 Investment Banking Fees by Region

According to other sources, global fees were nearly $160 billion, up 22%, with revenue in areas like M&A jumping nearly 50%.

Unsurprisingly, super-loose monetary policy combined with widespread panic about the future led to a boom in deal activity.

And since everyone was working from home, senior bankers could pitch far more companies from the comfort of their small mansions, resulting in record-high paydays for MDs and terrible lifestyles for junior bankers.

At the same time, compensation rose in rival industries, such as tech, and working 80-90 hours per week for $150K in total compensation increasingly seemed like a bad deal.

But the cherry on top came from the infamous “105-hour workweek” leaked presentation from a group of Goldman Sachs Analysts.

Together, these factors forced the large banks to increase pay.

That move has generated a few questions:

  1. Will these pay increases last?
  2. Given these higher base salaries, what will be bonuses be like this year and beyond?
  3. How does this higher compensation change the investment banking vs. private equity decision and the appeal of IB vs. other industries?

I’ll address these questions at the end, but I want to cover the main components of IB compensation and give some more commentary on the pay increases first:

Investment Banker Salary and Bonus Levels: The Main Components

For most bankers, there are five main components to “compensation”:

  1. Base Salary: This is what you earn via paycheck or direct deposit every two weeks. Up until 2021, these numbers hadn’t changed much in years.
  2. Stub Bonus: Since Analysts and Associates graduate from university or MBA programs and start working in the middle of the calendar year, they receive “stub bonuses” for their first ~6 months on the job. These are typically low percentages of Year 1 base salaries, such as ~20-30%, but they could be much higher at some firms (~50%).
  3. End-of-Year Bonus: You earn this after your first full year of work. Initially, it’s 100% cash, but a percentage will shift to stock and deferred compensation as you move up. As a later Associate or VP, it might be around 20-30% stock/deferred with a 3-year vesting period.
  4. Signing/Relocation Bonus: This one applies to Analysts and Associates who graduate and accept full-time offers. This signing bonus might be around $10-$15K at the Analyst level and $50-$60K as an Associate.
  5. Benefits: Finally, you’ll get health insurance, vacation days, and potential participation in the firm’s profit-sharing or 401(k) retirement plans. These are useful in the U.S. but less so in civilized places with functional healthcare systems, such as Europe.

Investment Banker Salary and Bonus Levels: Analysts

Initially, banks moved Analysts from the $85K – $95K progression for base salaries up to $100K – $110K.

Meanwhile, some elite boutique banks, such as Centerview, went up to $130K for Year 1 Analysts (!).

Then, in January 2022, banks went to $110K and $125K base salaries for 1st and 2nd Year Analysts, making the initial increase seem like chump change.

Bonuses for 2021 spanned a wide range, going from $75K to $115K for Year 1 Analysts and $105K to $145K for Year 2 Analysts.

And some elite boutiques paid above these numbers, meaning that some 2nd Year Analysts could have earned closer to $300K, depending on the base salary number you select.

On the other end of the spectrum, some regional boutiques might still pay base salaries less than $100K along with substantially lower bonuses, which is why I set $150K as the bottom of this range.

At large banks this past year, bonuses seemed to be around 100% of the old $85K – $95K base salary numbers, with some variation above and below that depending on the firm size and type.

But with these higher base salaries, that percentage will almost certainly decrease, so total compensation will stay about the same.

Investment Banker Salary and Bonus Levels: Associates

Banks increased the base salary progression here from $150K – $200K up to $175K – $225K.

Again, there were exceptions in both directions, with some elite boutiques paying above that and regional boutiques probably paying below that.

It’s also worth noting that different banks paid very different bonuses at this level.

For example, Citi and Morgan Stanley paid conspicuously low bonuses, with some Year 1 Associates at $300K or less in total compensation (down to even ~$250K).

Meanwhile, Goldman Sachs paid quite well, with many Associates in the $400K – $500K total compensation range, and various other bulge bracket and middle market firms followed suit.

And there were even reports of a few Associates earning $600K or more in total compensation (!) at some smaller firms.

One final note: Even at the elite boutiques, banks are shifting percentages of the year-end bonus to stock and deferred compensation.

The percentages are still fairly low (10-30%), but that adds some risk with a multi-year vesting period.

Investment Banker Salary and Bonus Levels: Vice Presidents

There seemed to be a modest bump in base salaries here, but the percentage increase was lower than what Analysts and Associates received.

The main point is that bonuses increased substantially; in some cases, they now represent 150-200% of base salaries.

I have no real data on compensation at regional boutiques, but I would not be surprised if base salaries and bonuses have remained lower, which is why I’ve set $500K as the minimum in this range.

Investment Banker Salary and Bonus Levels: Directors

Once again, the news here was substantially higher bonuses combined with base salaries that stayed about the same or went up modestly.

However, the stock percentage and vesting period also tend to increase at this level.

Investment Banker Salary and Bonus Levels: Managing Directors

As usual, it’s hard to say anything definitive about “trends” in MD bonuses because bonuses at this level depend 100% on performance.

If you close no deals, your bonus could be $0, but if you’re on fire, you could earn in the low millions.

The average MD is probably earning between $1 and $3 million per year, with a significant percentage paid in stock and deferred compensation.

The “ceiling” could be a multiple of that number, but the average MD does not earn in that range.

Regional Differences and London Compensation

If you go by the 2020-2021 Arkesden reports, the old numbers in London were:

  • Analyst: £50K – £60K base salaries and total compensation of £80K – £120K.
  • Associate: £90K – £130K base salaries and total compensation of £150K – £240K.
  • VP: £140K – £170K base salaries and total compensation of £250K – £350K.

But banks increased base salaries once again here, so the new numbers seem to be something like:

  • Analyst: £60K – £90K base salaries (yes, I know Centerview pays more).
  • Associate: £100K – £140K base salaries.
  • VP: £150K – £180K base salaries.

Total compensation is probably £20K – £40K higher for Analysts and Associates and more like £50K+ higher for VPs.

At a 1.35x GBP:USD exchange rate, these figures are still much lower than U.S. compensation, but that has been the case for a long time.

You can blame Brexit, better lifestyle/hours, and pay in competitive industries in Europe being lower as well.

What Does All This Mean? Is Investment Banking Worth It?

I’ll now return to the three questions in the beginning:

  1. Will these pay increases last?
  2. Given these higher base salaries, what will bonuses be like this year and beyond?
  3. How does this higher compensation change the investment banking vs. private equity decision and the appeal of IB vs. other industries?

To reiterate, the large banks were forced into paying higher base salaries due to high turnover, widespread job dissatisfaction, and rising prices and salaries elsewhere.

Without those factors, I’m sure they would have kept Analysts on $85K – $95K base salaries for as long as humanly possible.

In the future, banks in the U.S. will most likely do what European firms have already done and keep base salaries high(er) while reducing the bonus percentage, which keeps total compensation about the same.

Bonus numbers depend mostly on deal activity and fee volume for the year, and those vary substantially based on fiscal and monetary conditions.

We will probably see lower deal activity in the future, but I have no idea if this is one year away, 5-10 years away, or something in between.

Even if that happens, I think it will be difficult for banks to reduce base salaries, so they’ll likely cut bonuses to much lower percentages.

Regarding investment banking as a career vs. other options such as private equity, corporate development, or tech, the higher pay now makes IB more appealing on paper.

If you stay for the Analyst-to-Associate (A2A) promotion, you could easily earn more than you would in your first year of private equity.

Of course, the compensation ceiling at the top in PE, hedge funds, etc., is still higher, but you need to stay for 10+ years for that to be a factor.

If you’re in the “I want to stay in finance for ~5 years, earn a good amount, and then leave to do something fun/interesting” camp, moving into private equity may be less of a clear win now.

Finally, I wrote “on paper” above because working conditions and lifestyle also play a big role.

If your total compensation for the year increases by 15%, 20%, or even 30%, that might seem like a great result.

But if you’re working from a tiny apartment, you can’t go outside, you’re on call 24/7, and inflation is running at 10-20%, you’re probably not going to be satisfied.

That said, higher investment banker salaries and bonuses will satisfy new hires for a time.

But I doubt they’ll substantially reduce turnover or increase job satisfaction – especially now that “the spread” between different firms has become a gaping hole.

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Hi Brian,

    Do you have any insight into latest comp in Dubai for Investment Banks in various department, M&A or Financing Groups? From Intern to MD?

    Thanks!

  2. Hi Brian,

    Hope all is well. I’m currently at rating agencies, particularly CLO team at Structured Finance group. Which would be a doable move between DCM and leveraged Finance/Financial Sponsor Group after spending a year at rating agency.

    Thank you in advance.

    1. I think you could join DCM. Leveraged Finance and FSG would be more difficult but still possible.

  3. What kind of salary and total comp would you think is reasonable for a Director in Corporate Derivatives Sales at one of the large IB players in New York? The job is marketing interest rate derivatives. Thanks

    1. We don’t really track S&T compensation here, but Director total compensation appears to be in the $550K – $750K range currently. Maybe half base and half bonus?

  4. Hi Brian,

    I’ve been in the banking industry for 20yrs. Right now I am a Financial Advisor. Im waiting on an offer from a private bank and a national bank for a private banker position… I am currently at 120k and made the mistake of vocalizing where I’m at. Should I be negotiation for 200k? Based on your article I think those numbers have increased correct?

    1. So, these are salaries and bonuses for *front-office investment banking* positions. These are NOT salaries/bonuses for “all jobs at investment banks.”

      In other words, these figures apply only if your job involves advising large corporations on M&A deals, equity/debt issuances, restructuring, etc. If you don’t advise on large corporate deals, these figures do not apply.

      The salary/bonus scale for private banking and private wealth management (“financial advisor” roles) is completely different. You will not see numbers close to these because the potential fees are much lower and the market dynamics are very different. Please look up recent data for private banking and private wealth management.

  5. Hey Brian,

    Do you have any colour on the delta between makets/S&T pay and IB pay?

    1. I don’t have specific numbers for S&T, but the ranges seem to be significantly lower. I believe Analysts are in the $130-$200K range, Associates are $200-$350K, VPs are $350-$550K, Directors $550-$750K, and MDs around $1MM+ (completely dependent on performance).

      These #s might be a bit higher after the recent base salary increases, depending on how you count them, but there is a big discount in the mid-levels. If you adjust for hours worked, it might not be that different…

  6. Brian Cromwell

    Hi Brian, have you ever encountered bonuses not being paid to first year associates? If this is the case, is there anything the associate can do to make a case for himself? Basically the senior banker on my team hates me and think I’m an idiot so I’m sure he going to give me a bad review which will definitely impact my bonus and I want to be prepared with what I can do/say to counter.

    1. No, that sounds very strange. If they don’t pay you a bonus at all, that is basically the same as firing you. But it’s highly unlikely that this would happen just because one senior banker doesn’t like you. You would need the entire team to be against you for that to happen.

      All you can really do is speak with other senior bankers who like and support you and ask what the process is like. You can try to push to not work with this one senior banker in the future, but that can be tricky to pull off and depends on your group and the ratio of bankers at all levels. If the team is small enough, it probably won’t work… but if you know the Group Head or the most senior banker at the office, it might be worth speaking to him if the situation stays bad.

  7. Hi Brian,
    It’s great to see your report/take on this as it’s certified to be reliable. A question about the IB associate pay. You mentioned some associates pulling in 500-600k? Would elite boutiques such as Centerview, Evercore etc. who usually pay top of the street be paying associates this year even more than that? Also is that figure of 500-600k for first year associates or those who are in their 3rd/final year.

    1. There were a few reports in that range, but mostly from 3rd year Associates, and usually at smaller firms (not necessarily EBs, sometimes even MM banks that are known for paying above-market rates). But these are the exception and not the rule, with most other firms in the $400K – $500K range.

      The elite boutiques do tend to pay more, but not all uniformly, and sometimes it shows up in the form of higher base salaries.

  8. Where are you getting the data for these numbers from?

    1. News reports, press releases, compensation reports, threads on message boards, etc. There’s plenty of data out there. The problem is consolidating it all in one spot and coming up with reasonable ranges. It’s increasingly difficult to do that because banks now pay such different rates, even within the same levels.

  9. Hi Brian – I have been admitted to MBA at UCLA and UT Austin. My goal is to break into IB and then HF/PE. My background is not in IB. I have 3 years data consulting in a boutique firm and 1 year CRE research experience in a large AM both in the US. I know I have a difficult road ahead to achieve my goal but which school/location do you think will maximize my chance?

    1. UCLA is stronger for opportunities in CA and NY (and other financial centers). UT Austin might be better if you want to stay in Texas and focus on natural resources IB there. But in both cases, you’re at a disadvantage not being in or near NY because MBA recruiting tends to be more centralized.

  10. Brian,

    the salary ranges in London sound very reasonable, although do you think the total comp applies for example for French and Japanese banks?

    Any insight could be useful. Thanks for the article!!

    1. I haven’t seen a comp report that lists data split out by “official bulge bracket” vs. French vs. Japanese banks, but these firms could pay slightly less, or at least be slower in raising base salary figures. And bonuses outside the U.S., in general, are lower, they’re probably lower at French or Japanese firms.

      I believe Dartmouth Partners (https://www.dartmouthpartners.com/french-investment-banking-compensation-report-2021/) had Year 1 Analyst total compensation in Paris at around 100K EUR at the large banks last year, but I’m not sure whether it has increased since then (and it’s not a great comparison because these are still mostly the traditional BB banks in Paris, not actual French banks).

  11. How does that translate or impact wages in private equity?

    1. I expect PE firms will increase pay a bit (some already have), but they have less room to increase total compensation because it mostly depends on AUM… they can’t just increase pay by 30% in one year because there’s more deal activity. Also, even with slightly lower pay, PE is so ingrained in peoples’ minds that they will keep recruiting for the industry anyway just because everyone else does it.

  12. Dylan Stenzinger

    Thanks for the article Brian. I’ve got my post junior year summer internship coming up and your post have really helped me along the way. Keep up the amazing work!

    1. Thanks, glad to hear it!

  13. Hi Brian,

    Thanks for this update. I am about to get an offer as a first year analyst at a regional boutique bank in SF that does exclusively DCM. I have one year of experience in wealth management. What is the best way for me to determine what salary range I should be getting? Obviously this is entry level at a small place with much smaller deals than the big banks, so the salary will be lower than your data, but what do you think is the appropriate discount? If they big banks have raised starting for A1s to $100-125k, should I be trying to get $85-90k?

    1. I have very little real data on regional boutiques, but an $85-90K base salary sounds reasonable (traditionally, regional boutiques have paid about 20-30% less than larger firms). If you’re in SF, it would be quite ridiculous to ask you to live on less than that (though banks have done so in the past).

      I would just tell them that you expect a base salary in-line with current market rates, and when they quote a number, bring up the pay increases at the large banks over the past year. You don’t necessarily expect them to match them since it’s a smaller firm, but something closer to $100K would be reasonable.

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