![]() ![]() Several firms have already bitten this bullet, with Deutsche, Barclays and UBS all raising salaries for associates at the same time as analysts.īut the question now has to be asked – does this really mean more money? Even at the associate level, variable compensation is often bigger than salary, and at Vice-President or above, it’s pretty much de rigeur to think of things in terms of total comp. So by the end of the year, it’s very likely that the entire top tier of investment banking will have seen the basic element of junior banker compensation go up by somewhat more than 15% across the board. No announcement has yet been made about the rest of the associate program, but it’s hardly likely that second year associates will be paid much less than first-years, or that internally promoted ones will put up with less money than newly hired MBA grunts.Īnd although there is less of a direct connection, we’ve seen over the last six months that it’s very difficult for any bank to remain significantly out of step with the overall industry pay norms. JP Morgan is the latest big bank to recognise this inevitability, with an announcement going out that first year associates joining via the MBA programme will be paid $175k, up from $150k last year. So when the analysts are getting big pay rises, it’s pretty certain that associates are also going to see an increment. Different points have to bear some sort of reasonably stable relationship to one another you can’t have completely different pay scales for sales and trading compared to capital markets and advisory, and the salary increments between ranks have to be significant enough to make it worth people’s while to chase promotion. The difficult thing about an investment bank’s compensation structure is that it is exactly what the name suggests – a structure.
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