Investment bankers, especially those working on Wall Street, are known for their high salaries. However, the work is also known to be extremely demanding. Investment bankers often work long hours and are under intense pressure. Still, for those who can handle the work, the payoffs can be huge. A first year investment banking analyst straight out of college can make over $100,000 in total compensation. As they gain experience and move up to associate, vice president, and ultimately managing director levels, their base salaries and bonuses continue to rise significantly into the multiple hundreds of thousands or millions of dollars.
Junior investment bankers earn over $100K out of college
There is a clear career path and pay progression for investment bankers. Those right out of college generally start at the analyst level. According to Glassdoor salary data, the average base salary for an investment banking analyst in New York City is $86,308. On top of base salary, analysts receive an annual bonus. This bonus is often around 50% to 100% of their base pay. So total compensation for first year analysts can exceed $100,000.
Associates earn $150K+, vice presidents make over $200K
After 2-3 years, analysts may be promoted to the associate level. This comes with a significant pay bump. Associates may earn a base salary between $130,000 to $180,000. Their bonuses are often 70% to 150% of base pay. So total compensation ranges from around $150,000 up to $300,000+. After serving as an associate for 3+ years, they may reach vice president level. Base salaries for VPs range from $200,000 to $350,000, with bonuses from $100,000 to over $1 million based on performance and deal sizes.
Managing directors earn millions in salary and bonuses
The managing director or partner level represents the top investment banking job. They take home multi-million dollar pay packages. According to Wall Street Oasis, managing directors earn base salaries of $500,000 to $1 million or more. Their bonuses often reach several million dollars based on individual and firm performance. For example, a MD working on large M&A deals or IPOs may receive millions in bonuses for successfully completing those deals.
Top firms pay the most, boutiques less but better work-life balance
Salaries also differ between firms. The top investment banks on Wall Street like Goldman Sachs, JPMorgan, and Morgan Stanley pay the highest. Smaller boutique firms pay slightly less but may offer better work-life balance. Within firms, there are also variations in pay between groups. Those in top groups like M&A, leveraged finance, or equity capital markets may earn 20-30% higher pay.
In summary, investment banking offers some of the highest paying jobs on Wall Street straight out of college. However, bankers work long, stressful hours and are constantly under pressure to complete deals and generate fees. The highest pay goes to those who stick it out for many years and make it to the managing director level.