Comments on: Why Investment Bankers Make So Much Money (Minus Bear Stearns)

By: M&I

M&I — Sun, 26 Apr 2009 16:54:31 +0000

It all goes “to the bank.” The $50M itself is not actually split among the group – at the end of the year, the group’s revenue total is taken into account for bonus calculations but pay is not directly proportional, except at the higher levels.

So even if an Analyst didn’t close any deals, he will still get paid the same as other Analysts… but higher than that, and the difference can be significant. In 2002-2003, some VPs made more than MDs if the MD did not close any deals.

Groups at a bank really varies by bank, but maybe around 10-20 main ones at a large bank? People in a group again really varies by bank and group but at minimum there is 1 set of Analyst-Associate-VP-MD and usually multiple people within each of those categories… so one group might have 20 Analysts, 10 Associates, 5 VPs, and 3 MDs (for example).

By: Viewer

Viewer — Sun, 26 Apr 2009 15:44:47 +0000

in your example, you said that iBankers make so much because they sell companies for millions to zillions of dollars @ .1% profit.

if a company is sold at, let’s say, $50B so .1% of that is $50M…

how is it split? does the iBanker get that whole $50M? or x% goes to the analysts, associates, vps, mds of the group?

does it benefit only the group that sealed the deal?

how many groups are there in an investment company?

how many people are there in a group? what are their functions/positions?

thanks so much!!

By: M&I

M&I — Wed, 08 Oct 2008 23:46:17 +0000

True, but compensation levels will remain above those of most other fields. For PE/hedge funds in particular, there’s no way you can compete with 2% management fees on $20B under management if you make money by selling services or even high-end products.