by Brian DeChesare Comment (1)

2024 Investment Banker Salary and Bonus Report: The Ugly, the Ugly, and the Ugly

Investment Banker Salary Report

You could say that investment banker salaries and bonuses have been “disappointing” for the past few years.

The issue isn’t so much that they’re bad by historical standards, but that they rose sharply due to inflated deal activity in 2020 – 2021 and then fell just as sharply.

I’ll provide commentary on all this, including bank and group-specific differences, but let’s start with the cold, hard numbers:

Position TitleTypical Age RangeBase Salary (USD)Total Compensation (USD)Timeframe for Promotion
Analyst22-27$100-$125K$140-$190K2-3 years
Associate25-35$175-$225K$225-$425K3-4 years
Vice President (VP)28-40$250-$300K$450-$650K3-4 years
Director / Senior Vice President (SVP)32-45$300-$350K$550-$750K2-3 years
Managing Director (MD)35-50$400-$600K$600-$1300K+N/A

NOTE: All numbers are pre-tax for New York-based front-office roles and include base salaries and year-end bonuses but not signing/relocation bonuses, stub bonuses, benefits, etc.

These are all ranges: roughly the 25th percentile to 75th percentile across the “large banks,” with some adjustments (see below).

And yes, I’m aware that the elite boutiques paid above these ranges.

Now to the commentary and bank-specific differences:

What Happened to Investment Banker Salaries and Bonuses Last Year?

In short, it was another terrible year for all the sectors this site covers: M&A, capital markets, private equity, commercial real estate, venture capital, and more.

The Investment Banking scorecard from Dealogic with deal volume by region spells it out:

Investment Banking Revenue 2023

This chart showing the quarterly progression from 2021 to 2023 is also useful:

Investment Banking Quarterly Revenue from 2021 to 2023

This level of M&A activity represented a return to the deal volume back in the 2010 – 2013 period, right after the 2008 financial crisis:

Global M&A Activity 2010 to 2023

All the usual suspects hurt deal activity:

  • Higher interest rates.
  • Persistently sticky inflation.
  • Geopolitical uncertainty (Ukraine, the Middle East, China, etc.).
  • Increased antitrust and regulation, which killed several high-profile mega-deals, such as Adobe / Figma.

And there were a few additional factors this past year, such as the regional banking crisis prompted by the collapse of Silicon Valley Bank and the UBS acquisition of Credit Suisse.

The bottom line is that tech and finance companies continued to be quite cautious, which hurt deal activity and hiring across the board.

Many of these firms over-extended themselves during COVID, had a bad hangover in 2022, and hadn’t quite recovered by 2023.

Specific Trends in Investment Banker Salaries and Bonuses

From compensation reports, news stories, and online discussions, a few trends stood out this year:

1) Firm Variance – While base salaries were similar across firms, there were huge differences in bonus levels.

I normally don’t like to single out specific firms, but I’ll do so here:

  • Bank of America awarded terrible bonuses to Associates (and presumably VPs and up).
  • And William Blair also paid far below the normal bonus ranges due to over-hiring and a focus on the wrong deal types (e.g., SPACs, technology, and financial sponsors).

Meanwhile, most of the elite boutiques did great!

PJT Partners paid well above the standard ranges for Associates and VPs, and Centerview and Moelis were also quite generous.

Most of the bulge bracket banks, ex-BofA, were in the middle of this range: down from last year, but not a complete disaster (the same applies to middle-market banks and firms like RBC).

2) Individual Variance – Within specific banks and groups, the variance between top, middle, and bottom-bucket pay seems to be growing.

If you go back 5-10 years, the percentage difference between each level was not necessarily massive.

Now, however, scenarios like this are more common:

  • One Year 1 VP: $275K base; bonus is 65% of base.
  • Another Year 1 VP: $275K base; bonus is 30% of base.

They are paying a lot more attention to individual contributions and teams, especially for Associates and VPs.

3) Bonuses Follow Hours – Although the elite boutiques paid more than the bulge brackets this year, there was a “catch”: the hours were also much longer.

For example, some Associates at “not so busy” large banks were working 50 – 55 hours per week over the past year – not even close to normal investment banking hours.

But at firms like PJT or Moelis, it was not unusual to see 70, 80, or even 90-hour workweeks, which explains why some bonuses were 2-4x higher.

I point this out because while there has always been some correlation between deal flow, hours, and pay, it was less direct in previous years, and bonuses varied far less.

I’ll go level by level and explain some of these trends in more detail, but here’s a quick reminder of the main compensation components:

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. These numbers tend to stay the same for years and then move up periodically, at least at the Analyst and Associate levels.
  2. Stub Bonus: Since Associates graduate from 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%.
  3. End-of-Year Bonus: You earn this after your first full year of work. Analyst bonuses are almost always 100% cash, but a percentage will shift to stock and deferred compensation as you move up. For example, Associates might get 10 – 20% deferred, VPs might get 20 – 30% deferred, and MDs might get 30 – 50% deferred.
  4. Signing/Relocation Bonus: This applies to Analysts and Associates who graduate and accept full-time offers; like the stub bonus, it’s usually a low percentage of the Year 1 base salary.
  5. Benefits: Finally, you’ll get health insurance, vacation days, and participation in the firm’s profit-sharing or 401(k) retirement plans. In places like Europe, this one mostly takes the form of “more vacation days” since healthcare is government-funded.

Investment Banker Salary and Bonus Levels: Analysts

Based on payouts in mid-2023, Analyst pay has held up fairly well.

I listed $190K as the top of the range above, but plenty of Analysts earned above that, especially Year 2 Analysts at places like Guggenheim, Moelis, Perella Weinberg, and Evercore.

Year 3 Analysts are not that common anymore because banks changed the promotion schedule, but anyone on a $125K base salary should have easily cleared $200K as well.

Year 1 Analysts, on the other hand, were closer to $150K in total compensation, with a fair number of reports in the $130K – $140K range.

(This is why I used $140K for the bottom of the range rather than $150K.)

Overall, it was a ~5% drop; not terrible when you consider deal activity.

The real issues at this level were that:

Investment Banker Salary and Bonus Levels: Associates

There was a massive spread at this level, with Year 1 Associates at some elite boutiques earning bonuses that were 100%+ of base salaries (i.e., nearly $400K in total compensation) and others at closer to ~50%.

The news was even worse at firms like William Blair and BofA, where bonuses were only ~25% of base salaries in some cases.

Most other bulge brackets were in the middle of this range, with bonuses in the 50 – 70% range depending on your bucket, group, and year number.

Investment Banker Salary and Bonus Levels: Vice Presidents

The spreads for Vice Presidents were even wider; I found minimum total compensation of ~$325K all the way up to a maximum of ~$900K.

It’s such a wide range that it’s almost comical, and I’m not quite sure what to say.

I estimated $450K – $650K total compensation for the 25th to 75th percentiles above, and I think that is true for most of the bulge brackets.

However, plenty of elite boutiques paid well above this, with many reports of $700K+ or even $800K+ in total compensation.

Interestingly, the percentage of deferred compensation also varied a lot at this level, with the biggest banks being more conservative.

Investment Banker Salary and Bonus Levels: Directors

I have almost no data here, so I extrapolated and assumed a ~7% drop over the numbers from last year.

Directors can still earn a lot, but outside the EBs, they were mostly in the mid-to-high-six-figure range.

Investment Banker Salary and Bonus Levels: Managing Directors

Whenever deal activity plummets, Managing Directors absorb the brunt of the damage, and the same thing happened this year.

You can read all about MD pay on Bloomberg or Financial News, but the short version is that many MDs’ bonuses were down 15 – 20%.

That means that many MDs this year earned closer to $500K than $1+ million.

It’s completely plausible that some VPs and Directors out-earned MDs simply because their bonuses are not linked quite as directly to closed deals.

Regional Differences and London Numbers

Usually, Arkesden and Dartmouth issue good reports on London, but I couldn’t find anything updated for this past year.

But once you factor in the USD/GBP exchange rate and the always-lower pay in London, it’s reasonable to expect at least a 15 – 30% discount on all these numbers.

efinancialcareers has a report from October that shows these pay ranges:

  • Analyst: £100K – £130K GBP ($126K – $163K USD)
  • Associate: £180K – £250K GBP ($226K – $314K USD)
  • VP: £240K – £330K GBP ($301K – $414K USD)

I am “rounding” these, and I have no idea how accurate the numbers are, but there isn’t much else out there.

Similarly, I have nothing on Asia, Australia, or other regions aside from the Bloomberg article with a few scattered references.

So, What Does This Mean for Future Investment Banker Salaries and Bonuses?

I made a simple prediction in last year’s bonus report:

“In the future, I expect compensation to continue to fluctuate significantly from year to year, so you should expect less of a ‘straight line’ in your career and earnings.”

And I stand by that prediction – as we’ve now seen the impact of two bad years in a row.

I do expect an improvement in 2024 because capital markets and M&A activity are starting to pick up in most regions.

Companies can only be cautious for so long, and most “deal slumps” only tend to last for a few years.

That said, I am still less optimistic about deal activity and bonuses than other sources (e.g., executives at elite boutique banks) for a few reasons:

  • Inflation and interest rates are both structurally higher and are unlikely to return to “2010 – 2019 levels” anytime soon.
  • Antitrust and regulation will continue to limit the biggest deals. We’re now in a very different legal environment, and some bankers are still in denial.
  • Demographics will soon become a problem in many countries (South Korea is disappearing!), and growth in emerging markets will not make up for it on a per-capita basis.

So, assuming an uptick in deal activity and no major disasters, I could see a modest bump in bonuses this year – perhaps a 10 – 15% increase.

But if you’re expecting 2021 bonuses anytime soon, you’d have better luck with a DeLorean time machine.

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

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  1. What is your source for this – anecdotal or decent number of survey data points? How many data points for the VP numbers? Not questioning your range but trying to understand methodology.

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