M&I Podcast Episode 001 – Sales & Trading Compensation in 2014
When I sent out an announcement a few months ago asking for questions about sales & trading, I didn’t quite expect the response we got.
That one simple email generated 500+ questions, many of which were detailed and intelligent, and therefore way above my pay grade.
To solve that problem, I brought in an associate editor who’s written several great articles on S&T in the past, including one on the equity trading floor and another on a day in the life of an options trader.
He has trading experience on both the sell-side (bulge bracket bank) and the buy-side (hedge fund), and he also managed to write the best S&T interview guide I’ve seen, plus a great guide for S&T internship prep at salesandtradingcareers.com.
We sat down to discuss the most interesting S&T-related questions first – in other words, the ones about salaries and bonuses.
Here’s what happened:
Sales & Trading Compensation in 2014
We focused on compensation in this episode because things have changed a lot at banks since the financial crisis… and even within the past 1-2 years.
Compensation in investment banking, private equity, and hedge funds also looks different, but it has changed less than S&T pay has.
I learned a ton in this discussion, including:
- Why two traders that both earned $50 million for the bank might get completely different bonuses.
- Why some banks, at least in London, are now paying different salaries and bonuses to entry-level traders (be careful…).
- Why “the death of prop trading” has been exaggerated, and why it may not even make much of a difference to compensation.
Why a Podcast? And Why Now?
It seems to be the thing to do.
Several dozen popular blogs and content sites have started podcasts in the past 1-2 years, so why not M&I as well?
Actually, though, this is more like restarting the podcast series from 4-5 years ago.
It was time to change up the format and content here, and a podcast is a great way to cover topics that don’t lend themselves to articles or videos.
Finally, it’s much easier to get guests to sit down for a 30-40 minute chat than it is to go back and forth multiple times with written documents.
If you think bankers are unresponsive when you cold-email them, try sending over a list of 10-15 questions and asking for a 1,000+ word response via email.
Table of Contents, the Transcript, and More
Here’s the full Table of Contents for the episode, so you can skip around if you have ADD or you’re otherwise busy:
- 2:28: Background of Interviewee
- 3:44: Entry-Level Compensation in Sales & Trading and Differences Between Banks
- 8:23: How Pay Changes As You Advance
- 11:37: How Your P&L Relates to Your Compensation
- 14:49: Compensation for Senior Traders
- 17:33: Deferred and Stock-Based Bonuses
- 20:08: Sales vs. Trading and Compensation Allocation
- 22:49: Compensation Differences Between Different Desks
- 25:27: The “Death” of Prop Trading and How That Has Affected Compensation
- 29:02: Basel III and Other Regulations
- 30:53: Future Outlook for Sales & Trading Hours and Work/Life Balance
- 33:57: Conclusion
Got iTunes? Or Stitcher? Or SoundCloud?
Update: You can now subscribe via iTunes, Stitcher, and SoundCloud below:
- iTunes – The Mergers & Inquisitions Podcast
- Stitcher – The Mergers & Inquisitions Podcast
- SoundCloud – The Mergers & Inquisitions Podcast
I’m aware that the sound quality could be better.
A Skype conversation will never be “radio quality,” but the next episodes should sound better as the process is improved.
Of course, my data shows that you greatly prefer to read the transcript anyway, so this might not matter much.
Questions or Guest Suggestions?
If you have more questions you want to see addressed on this podcast in the future, leave a comment below or reply to one of the M&I newsletter emails (yes, I personally read everything).
And if you have suggestions for future guests, or you want to be on the podcast yourself, also leave a comment below or reply to one of my emails.
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