As we reported yesterday, the highest-paid investment bankers tend to work at prestigious boutiques. That said, big banks aren’t too far behind. But like boutiques, when it comes to compensation, it’s all about the name on the front of the building.
A new study from banking executive search firm Pinpoint Partners breaks down salary and bonus numbers by institution classes. Rather than including all multi-national investment banks under one umbrella, they separated them into two buckets for the U.S.: bulge-bracket banks and large financial institutions – essentially tier 1 and tier 2 banks. The two lists mirror recent iterations from research firm Coalition.
Bulge-bracket firms in tier one include Goldman Sachs, Bank of America, Morgan Stanley, J.P. Morgan, Citi, Barclays, Credit Suisse, UBS, Deutsche Bank and Nomura. Meanwhile, the large financial institution list is made up of BNP Paribas, HSBC, Jefferies, Macquarie, RBC Capital Markets, Societe Generale and Wells Fargo– all in tier two.
So just how do the two tiers stack up in terms of pay? As you’d likely imagine, investment bankers at bulge-brackets – or tier one banks – earn more money than their U.S. peers at other large firms. But what really stands out is the differences in pay as you move up the ladder toward management.
Analysts at banks on both lists earned around the same last year ($151k vs. $147k in total compensation – base plus bonus). However, the difference in pay grew to nearly 9%, on average, for associates. At the vice president level, investment bankers at tier 1 firms made 18% more than peers at tier 2 banks, resulting in a nearly $100k variance in take-home pay. For managing directors, the difference was nearly 22%, or around $294k. While offers for junior bankers don’t vary much firm to firm, the bigger-name banks appear much more generous with experienced staff.
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