Top Dogs Hogging the Bonus Pool, Headhunters Say

by StockJockey

Thursday, December 22, 2005 - 10:01 am

Dow Jones is reporting that bonus pools are being disproportionately allocated to the upper ranks, disappointing mid-level professionals and setting the stage for high turnover in the first quarter. Discussing how events played out at Goldman, Lehman and Morgan Stanley last week, David Reynolds, the executive director of global markets at London-based executive search firm Sheffield-Haworth, said, “Bank top producers were very happy but mediocre performers and several junior team members were left disappointed.” The upshot according to Reynolds? “With a defined bonus pool, this strategy has clearly affected lower producers’ and junior members’ bonuses and I expect to see a number of these individuals seeking new pastures in 2006,”

Comments:

he’s definitely right.

Posted by on 12/31/1969 at 03:00 PM

Are the above mentioned comp ranges from a published source or just word-of-mouth?

Posted by on 12/31/1969 at 03:00 PM

Total comp / all-in / salary + bonus

Posted by Anony-pus on 12/31/1969 at 03:00 PM

2005 Comp Ranges

MAJOR BANK 1
ASSOCIATES
1Y/2004: $280 - $345k
2Y/2003: $325 - $425k
3Y/2002: $400 - $550k

MAJOR BANK 2
ASSOCIATES
1Y/2004: $255k - $300k
2Y/2003: $275k - $375k
3Y/2002: $350k - $475k
2006 base -> up to $115k
VP
1Y VP/2001: $420k - $520k

MAJOR BANK 3
ASSOCIATES
1Y/2004: $250k - $300k
2Y/2003: $300k - $400k
3Y/2002: $350k - $500k

MAJOR BANK 4
ASSOCIATES
1Y/2004: $255k - $300k
2Y/2003: $275k - $375k
3Y/2002: $350k - $475k
VP
1Y/2001: $420k - $520k

Posted by Anony-pus on 12/31/1969 at 03:00 PM

Comp ranges @ major bulge bracket NY investment bank ($ in Thousands):

1Y ASSOC: $200-285
2Y ASSOC: $250-375
3Y ASSOC: $350-455

1Y VP: Max of $550
2Y VP: Max of $650
3Y VP: Max of $775
4Y VP: Max of $900

Posted by Anony-pus on 12/31/1969 at 03:00 PM

Sounds like how mid-level free agents in MLB are traded around. The team not paying the bonuses certainly see mid-level producers as expendable and want to maintain a bonus cap, but others will see something that worth salvaging. I’d hate working in the investment banking business, but it’s okay seeing play out from afar…

Posted by on 12/31/1969 at 03:00 PM

Can we clarify what we mean by “bad” bonuses? In recent conversations I’ve had with Associates and VPs in the top banks, most of them seem to be expecting from $100K on the low end to $500K on the high end. Are they just wrong, or are you saying that those kind of numbers are “disappointing”?

Posted by escap on 12/31/1969 at 03:00 PM

Hearing through the grape vine that the general view at one firm was “what happened to the money?” This firm had the best year ever and, though 1st and 2nd year Associates were paid on par with the peak levels seen in 2000, that didn’t translate into the VP, SVP, or even MD ranks. On average, the numbers were a bit disappointing. Maybe it all went to pay for the big contracts for the hot shot bankers that this firm has been hiring over the last 12 months (sound familiar?).

Posted by on 12/31/1969 at 03:00 PM

I hear a lot of this kind of talk, but let’s face it, the “lower level” guys in the i-banks are still paid huge sums. Any whining from those types is not going to meet much sympathy.

Posted by escap on 12/31/1969 at 03:00 PM

What do you think this is? The Government??? They dont publish this stuff. Its all word of mouth—but the above info is confirmed with numerous sources.

Posted by Anony-pus on 12/31/1969 at 03:00 PM