Investment Banker Salary and Positions
A career as an investment banker can have many twists and turns. One perk that draws many employees to Wall Street as an investment banker is the salary. The investment banker salary can fall in a range between $60,000 for entry level analysts to $70,000,000 for top executives and anywhere in between. The investment banker salary is comprised of a base salary and bonus. At the lower levels the salary is the primary form of compensation, but as one progresses higher in the investment banking ranks, their bonus represents a larger and larger portion of overall compensation.
First Year Analyst: $90K - $150K, typical all-in compensation $125K
First year analyst is the entry level position in investment banking. These are generally recent college graduates who have been recruited by the investment banking firms. While some may enter with some previous internship experience, the first year analyst generally has limited prior experience and will learn a lot through training and the many long hours that are to come over the next year. This salary range includes both first and second year analysts.
Third Year Analyst: $120L - $350K, typical all-in compensation $165K
Third year analysts have been through the trenches and are more experienced, refined, and polished than first and second year analysts. Their knowledge and understanding of the investment banking process allows them to work more quickly and efficiently and to be involved in more complex analysis and oversight in the process.
First Year Associate: $150K - $250K, typical all-in compensation $180K
First year associate bankers are often hired out of business school with an MBA in finance. The first year associate may have prior investment banking experience as an analyst, or may come from another industry. In any case, the associates MBA often gives them a leg up in academic understanding of the complex nature of investment banking and capital markets. They also have an increased responsibility to oversee and manage the work of the analysts.
Third Year Associate: $300K - $500K, typical all-in compensation $350K
The third year associate will have much more experience with the various transactions of the group. This position requires the associate to manage the transactions as well as manage relationships between their superiors and subordinates. Associates often take the brunt of the anger when a presentation is not correct.
Vice President: $300K - $1MM, typical all-in compensation $700K
The vice president is a promotion from associate. Vice presidents are heavily involved in the creation and formatting of a presentation, but do not have the same responsibilities that a director might have involving clients. The vice president will oversee the analysts and associates to ensure that the client presentation is complete and without error.
Director / Principal: $400K - $1.5MM, typical all-in compensation $900K
Because titles are different across the various investment banking firms, directors and principals often have the same responsibilities depending on where they work. The director or principal has an increasing role in the management of client relationships. They oversee the work of many staff, but are primarily focused on serving the client in the transactions and looking forward to additional opportunities for the firm.
Managing Director / Partner: $500K - $20MM, typical all-in compensation $1.5MM
The managing director or partner is regarded as the top employees in the investment banking firm. The primary responsibility of this role is managing relationships with current and future clients. They often have a pulse on the market transactions and are able to pitch to potential clients.
Department Head: $800K - $70MM, typical all-in compensation $3.5MM
The department head in responsible for entire departments within in investment banking firm. For instance, the head of capital markets, mergers and acquisitions, sales and trading are all department heads. These individuals are responsible for laying vision and strategy for the department and firm. They represent their respective departments in conversations with senior management.
As an investment banker moves up the corporate ladder, they gain increased responsibility and as a result, increased compensation. Promotions differ across firms, but at the lower levels tend to be pretty systematic. While is may take many years to achieve, the investment banker salary draws many employees to pursue this career in finance.