by Brian DeChesare Comments (45)

How Investment Banking Analysts Get Ranked for Bonuses: Roll the Dice, Please


One question that comes up whenever banks announce bonuses is how you get ranked in the first place.

Sure, we all want to be “Top Tier,” but how do you actually get there?

There must be a complex “ranking” process at banks to ensure high standards for everyone…. right?

Nope. It’s actually more like spinning the roulette wheel – or rolling the dice.

Red or Black?

Ok, it’s less “random” than roulette – but there’s also less skill than poker.

And it’s far more random than how summer analysts get offers.


At most banks, the “review” and “tier assignment” process goes something like this:

1. Several months before bonuses are awarded, people who have worked with you will “review” you – sometimes you see these reviews, and sometimes you don’t.

2. Then the MDs go off to New York (or London if you’re at Barclays…) and meet with other MDs to “fight” for how much of the bonus pool gets allocated to their groups.

This doesn’t affect Analysts too much – Analyst “tiers” are usually the same across different groups at a bank.

For anyone more senior, the amounts vary quite a bit depending on how many deals your group closed and how much you contributed personally.

3. Then, back at your own office the MDs discuss internally how they want to “rank” each Analyst, sometimes involving the VPs or whoever else worked closely with you.

Other than step #2, you might think this sounds similar to the summer intern offer process – but there’s one big difference:

Summer interns are awarded offers based on 2-3 months of performance, whereas full-time Analysts are split into bonus tiers based on 12 months of performance.

More often than not, this leads to strange and random things happening.


The finance industry as a whole – and investment banking in particular – has an extremely high turnover rate. Friends have moved to 3 different firms within the span of 1 year (admittedly, this was when the market was better).

If you’re a summer intern and you get to know 1 VP or Associate really well, he’s unlikely to leave in the span of 8-10 weeks – but switching firms, getting laid off, or leaving the industry altogether in the course of a year are all  common.

Another friend spent 75% of his time working with 1 VP in his group, and then had the VP leave 2 months before bonuses were announced – you can bet that his bank account was not too happy.


Theoretically, Analysts are divided into tiers based on their “performance” – how well they did their work.

But it’s not quite that simple:

You don’t benefit much from being a “star,” but you can get screwed if you make the wrong mistakes in front of the wrong people, especially if it’s close to bonus season.

It’s impossible to do anything to “boost revenue,” but there are plenty of ways your mistakes could cost your bank money – so there is a strong bias against mistakes rather than going the extra mile.

And even though you’re being judged over the course of a year, most people forget what happens in the middle and only remember the beginning and the end – so it’s not the “weighted average” of your work.

So, What Can You Do?

If the ranking process is so random, what can you do to improve your chances of getting a decent bonus?

Beginning and End Bias & First Impressions

As mentioned above, the beginning and the end – roughly the first and last month – of your time as an Analyst are more important than anything else.

No matter what you do, you’re going to make mistakes when you first start – the key is to recover rapidly and show that you learned your lesson before you make another silly mistake.

And don’t be like one former colleague of mine who kept asking for “cross-border China deals” in his first week at work (unless you want bottom-tier bonus, like he got).

Be doubly cautious in the beginning and quadruple check anything before showing it to a senior banker – and get a 2nd year Analyst to look at it. No matter how much you think you know, every bank does things differently.

The same advice applies to your final months before bonus season: check everything more than you usually would, print it out, and make sure you don’t miss any meetings because you “overslept.”

Spreading Your Net

You need to get to know lots of different people as an insurance policy – just in case your staunchest advocate leaves or gets laid off midway through the year.

Summer interns are fine getting to know just their team and making a good impression on them, but you need to be more thorough if you’re a full-timer.

The easiest way to do this: get introductions from other full-time Analysts who know different people in your office, and take it from there.

Take a look at our articles on investment banking networking for more detailed advice.

Don’t bother getting to know people from different offices, unless you’re interested in moving elsewhere – they don’t weigh in on your bonus at all.

Stop Thinking About the Number

One final tip: stop thinking about your bonus number. Yes, if you do a better job than someone else you might get $5-$10K more, but that is not much over an entire year.

You should be more concerned with the quality of your recommendations, both for the buy-side and for business school – because those will actually make a big difference in the long-run.

Not all banks have a tradition of “recommending” Analysts to different funds, but most of the larger ones certainly do – they know that very few people stay beyond 2 years.

So you should spend most of your time thinking about that, and how to get the MDs with the most connections to “go to bat” for you and make the recommendation that gets you that interview at Blackstone.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Avatar
    Thomas Heyden

    How do IB bonuses work logistically? Bonus season is typically March or April, but do 1st-year analysts get a check at that time? Or is it in the form a tax refund the following year? What are the tax implications of a bonus?

  2. Hi I was wondering if you can help me, I was wondering where to start in getting a job in the US and what kind of a job you would recommend me to apply for. I have a bachelor in industrial engineering and 2 years work experience in Risk management in a investment bank in Europe. I am currently doing a MBA in SF, i’m willing to relocate if the opportunity arises.

    Anything would help.

    1. It depends where you want to work and what you want to do… NYC is best for finance recruiting, but there are a fair number of banks in SF as well. Maybe start here to narrow down your options first:

      1. Thank you Brian

        I´d like to be in SF,NY, TX or London. I would be interested in working with :

        * Capital Markets
        * Asset Management
        * Fund Management
        * Risk Management
        * Treasury Management
        * Fixed Income
        *Quantitative Analytics

        Should I be looking for a Associate position ? and what salary should I be seeking ?

        1. If you’re currently doing an MBA, yes, you should apply for Associate roles. If you do a search for “hierarchy” you’ll see an overview with salary figures.

          That is still a very, very broad list and you need to narrow it down more.

    1. Looks interesting but $11.99 for an app? Really?

      1. Yeah, does seem steep, but I suppose they have to make sure not everyone can just go and buy it

  3. Does all of this go for S&T too?

    1. For S&T it’s a lot more based on your performance as you move up. For analysts that is also true to some extent, but like this article suggests, usually for 1st and 2nd year analysts you’re subject to politics… however, one difference in S&T is that it’s harder to work with different people as much due to the desk structure, so that can also make it riskier.

  4. I just started at a boutique where the analyst class is very small and all male. I feel like I’m having a hard time connecting with the other analysts–not sure if it is a gender issue or if I’m just not playing the office politics game right. Since I’m planning on switching banks after a year and, as you said, turnover in the industry is so high, should I be so consumed with trying to make friends or focus on keeping my head down, doing the best job possible and getting into a good industry vertical?

    Thanks so much!

    1. You should get to know at least a few people, but performance is still pretty important. If no one wants to make friends, just focus on work for now.

  5. Currently an associate with a BB. If I want to eventually start a VC firm or a hedge fund, what carrier plan should be best for me. I do not hold a MBA at this time.

    1. Move tot he buy-side at an asset management firm, hedge fund, or VC firm, and start making your own investments. Develop a solid track record over 10-15 years. Leverage that to start your own fund.

  6. Avatar
    Positive Carry

    “Don’t bother getting to know people from different offices, unless you’re interested in moving elsewhere – they don’t weigh in on your bonus at all.”

    What about GS, bragging about being meritocratic, and stating that their bonus and partner rankings are set by people working at other divisions – so the evaluation becomes as objective as possible?

    1. I don’t know specifically at GS but no banks really do it like that… it’s all based on what your team thinks. How would someone who has never worked with you at all be able to assess you? It doesn’t make any sense.

  7. What is the best way for me to try to get into capital markets (i.e. i-banking analyst, equity analyst)?

    I graduated from a top Canadian business program but graduated during a tough time in the economy and unfortunately did not land a banking job. I am currently in a financial analyst position (finance/accounting) and I am thinking about doing my CFA and will definitely be doing my MBA after 2 years of work experience.

    Is there anything in particular I can do, or will I just need to have a strong GPA when I pursue my MBA.


    1. Network to a small boutique and take it from there – do a search here for “accounting” and “networking” for more tips. Also “Canada” for a Canada-focused interview.

  8. Hi,

    Any advise on following up on interview results?

    I had 2 interviews with a MM IB firm recently. 1st interviewer was a director who said he was going to support my application. 2nd round was with a junior manager who only said they will let me know in a week’s time. It has been 9 days.

    Thanks. Your advice has been life changing..

    1. I would contact the director again and see what the story is – you should have heard back already if it has been 9 days.

  9. Thanks for the help earlier. Another Q: I have been contacting firms asking for potential job opportunities — but if I ask to speak to an Associate the secretary or HR director usually tells me that they wouldn’t be able to help and then connects me to HR which seems pretty useless. Is it advisable to find Associates NAMES at firms on LinkedIn and then call the firm to ask directly for them? Or should I just speak to whoever they pass me through to?

    1. Yes, find the names… don’t just ask for “an Associate” – say that you spoke with them earlier and are calling them back. If they patch you through to voice mail, say you got disconnected, call back and ask for their cell phone number.

  10. What do you do if you’re at a reputable MM firm that is not busy to the extent that associates are barely working 45 hours/week, let alone having extra work to give the intern, myself. I’ve been spending most of my day wasting time, aside from a few quick 15 minute projects. Should I go to the VPs/MDs to tell them I need things to do? Should I suggest my own projects? I’d rather do something monotonous than feel like I’m worthless for staring at youtube.

    1. Yeah, try to get your own projects going, get to know the VPs and higher-ups in your office, offer to help with recruiting, and if no one is helpful just go and create a valuation or other model of a company based on an existing model.

      1. Is there a possibility of going to a client meeting or pitch as an intern, even if its just to observe. Is it feasible? How could I ask about this?

        1. Yeah it definitely happens, but I wouldn’t ask explicitly… especially if your office isn’t busy to begin with. It’s more something that the higher-ups would tell you about as an added “bonus.” Maybe if you get to know a VP or Associate well you could ask him casually about going.

  11. Here’s a question I hope you can answer..

    Is there a difference in between entering a hedge fund (aqr capital, citadel) straight out of undergrad and entering a same type of hedge fund after a 2 year stint of investment banking at a bulge bracket? Different career paths and/or compensation that are related to this?

    The reason I ask is that I am going to be an undergrad this year at Penn studying finance (Wharton). I do eventually want to end up at a hedge fund and so I am also going to be studying statistics and/or minor in comp sci. However, I am extremely interested in transferring into Penn’s Jerome Fisher Management and Technology Program, which gives you two full degrees, one in the business school and the other in the engineering school. However this program is extremely rigorous and competitive, and so there is a tradeoff. Also, I have looked at Penn’s career surveys and each year, a few of these M+T’ers end up at citadel and aqr capital. I wanted to know if this is path of going to a hedge fund is recommended over going to an investment bank first and then exiting the industry to a hedge.

    I will be studying comp sci and finance if i get into this program, but dont want to expend so much energy, time, and effort if the results are not going to be too substantial.

    Thanks for the response Brian, I appreciate it very much.

    1. Yes, you enter at a higher level if you’e worked for 2 years. I would still recommend going to a bank first because it gives you more options. If you go to a hedge fund right away you will basically be stuck there unless you go to business school in the future.

      Also, watch out for Citadel – last I heard, they were about to fold…

      1. Okay thanks!

        I should have asked this question as well..

        Is the position the same for a person who has already worked two years at a hedge and for a person who worked two years at a BB and then moved onto a hedge?

        So both people have been out of undergrad for a couple years and both are now at a hedge except that person one worked his first two years at the same hedge and person two worked his first two years at an investment bank? Would person two’s position that he transferred into be the same as person one’s current position after two years at the same fund.

        I do know I just asked the same question in two different ways in the post, but I really hope I am phrasing this question correctly.

        1. Hedge funds are very random so that is quite dependent on the fund. If you START working there, you may or may not get “promoted” in 2 years – if you don’t get promoted, you are probably out (up or out).

          But assuming you do get “promoted” then yes, the position would probably be about the same.

          Again, I would emphasize that unlike banks / PE most hedge funds are more unstructured and therefore positions / pay / bonuses are all over the place and can be highly variable.

        2. Okay thanks again.

          Then do you think i should try out for this program? I mean I need to take the necessary prerequisites and that will probably bring my gpa down.

          I know i can get a 3.7+ if i just did a single degree, but with a dual degree my gpa will most likely a 3.5, if that. Come BB recruiting time, will my slightly lower gpa be excused due to this difficult program?

        3. Ty,

          I’m a Wharton graduate, so I’ve known a decent # of people who are in the M&T program.

          My perception is basically this:

          1. M&T is basically risk/reward trade/off. If you are outstanding at M&T (3.8+ GPA) you will have interviews (and offers unless you screw up terribly) at your beck and call. In a good economy, people with more subpar GPA’s (3.3-3.8) still managed to get a very high amount of interviews, but they, along with a good chunk of Wharton get cut from interview slots in the resume selection process when the economy goes downhill. There are outliers who through a combination of sheer brilliance (and outside academic results to show for it) still have a good time from interviewing, but for planning purposes you should never count yourself on being a “good” outlier as opposed to the normal distribution.

          2. Don’t underestimate how hard it is to do well in M&T; there’s a reason that most of the graduates from it (even though I honestly consider them smarter on average than most of Wharton) don’t necessarily have good GPA’s (3.5+) for recruiting purposes.

          3. If you do M&T, prioritize, prioritize, prioritize. If you’re in regular Wharton like I was, being decently smart is enough to skip all your classes, show up for the midterm and final, and do reasonably well. Don’t count on such wonderful fortune in M&T. Combination of Engineering and Wharton degree together requires that for you to do well you will either 1) be the smartest of the smart, or 2) [and much more likely] have kept and intensified the work-hard habits that were there in high school (going to classes, actually doing practice problems, etc.) and adapted them to a college lifestyle [lifestyle being pushed aside if necessary of course].

          Hope this helps,


  12. Hey Brian,

    What’s your thoughts on reaching out to people on LinkedIn that you don’t know? Sometimes when I see a firm I am interested in applying to I try and send one or two people at the firm a really informal e-mail through LinkedIn saying that I am interested and would love hear more? Is that too pushy or is that a good way to network with those folks?

    1. Go ahead and do it, nothing is too pushy when it comes to networking. I always prefer the phone to LinkedIn / email though – I tell people to email me when I just want to ignore them. :)

  13. Avatar

    Hi Brian,

    Do you have any thoughts on ‘refer-a-friend’-type programs? Obviously it’s good to be on bank’s radar screen, but are these just glorified networking opportunities?

    1. Not really familiar with them off-hand – but without knowing anything, I would say any type of networking is good to pursue and will pay off in some form.

  14. I am halfway done with my middle market banking internship and it has been very informal how they’ve run it. How do I go about getting feedback, maybe asking for a midterm review, and what should I be doing now?

    1. Ask the people you know best, but don’t try to push for that stuff if it has been informal… ask some of the analysts you know better what is going on and what to expect, and if they don’t know, then go to higher-level people and ask them instead.

      If it’s informal I would not worry too much – continue to make people like you and you’ll be fine.

    2. Dave,

      If you’re not getting the level of feedback you need, definitely ask. At a minimum, it shows you’re looking to improve. Also try to get a sense of the top 3 priorities your boss has for the summer, and try to align with them and make his/her job easier in addition to your current projects.

  15. Hi,
    Could you tell me if there’s a huge difference between bonuses between the top hedge funds and the top fund of hedge funds?

    Is it a good idea to work for a fund of hedge funds as opposed to I-banking right out of school if I want to ultimately want to be in a hedge fund?

    Thank you.

    1. No, i-banking is still better. Fund of funds you don’t really learn much about how to invest in companies and it’s too high level.

      And yes, there is a huge difference in bonuses even among different hedge funds so there’s definitely a big difference between funds of funds vs. hedge funds.

  16. Thank you so much for writing this article so quickly! I really, really appreciate it.

  17. Avatar
    jojo mukherjee

    Hi Brian,
    Thanks a lot for the article. I have a question that is not completly related to this article. I just got an email from a major bank asking me to rank the top 3 groups of my choice and apply to my first choice(for full time). I was wondering what are the best groups to apply to now. I am from a non-target school with no banking experience and was looking for a group that might have more dealflow in this environment so my chances of getting hired are higher.


    1. Healthcare, government/defense, restructuring, financial institutions, maybe M&A depending on the bank.

      Avoid anything directly linked to consumer spending like retail.

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