4 ms·

Problem potentially even more dire than article makes it "These jobs pay very well. According to the job search site Indeed.com, the average salary for an entr

by jsun 13y ago

Problem potentially even more dire than article makes it "These jobs pay very well. According to the job search site Indeed.com, the average salary for an entry level software engineer in New York City is $71,000—just about the average for an entry level investment banker." is a very misleading statistic. At a good school maybe the top 5% of a graduating finance class gets banking jobs. Pretty much every single CE or CS major gets a job in technology if they want one. The top 5% goes to work for a top tech firm who routinely pay 1st years 100-120k+, with amazing perks, work life balance, and tremendous growth potential.

refurb 13y ago
The difference is the long-term compensation potential. There are many jobs you can take as a fresh undergrad that will pay you what a investment banking job will. However, there are very few jobs that will pay you $1M+ after 10 years of experience.
- rayiner 13y ago
  The key word there is "potential." You have to account for the fact that due to the "up or out" system, most people will never be there long enough to earn $1m+. Now that Google and similar companies are breaking through the "low $100k" salary ceiling that used to be common in tech, you really have to compensate for the probability of lasting long enough in a bank (or being able to exit to PE/VC/HF) in order to earn those really high salaries.
  - refurb 13y ago
    I don't disagree. However, investment banking is a relatively low risk way to a multi-million dollar salary. You stand a far greater chance of surviving the up-or-out than striking it rich through a start-up.
chrisgd 13y ago
The salary is just base. Bonus is probably 100-250% of base, and a lot of times the 100% part is guaranteed. Just for comparison sake.
- rayiner 13y ago
  Not for junior analysts, and not in this economy. Average base + bonus seems to be just over $100k for junior IB analysts at GS/MS/JPM this year, pushing to just over $200k after a few years. After that, the banker starts to pull away rapidly, and can earn the 100%+ bonuses. But on the flip side, you can probably still expect to have a job at Google in a few years, but the standard for investment banks is a 2 year contract after which only the best analysts are retained.
  - ajiang 13y ago
    Nope. 120-130K all in for top bucket in 2013, with some firms paying 140-160K (see BAML and Moelis). Also not true is the 2 year contract, as GS is moving towards a career model and away from a 2 year analyst model. http://www.mergersandinquisitions.com/2013-investment-banking-bonuses/ http://www.mergersandinquisitions.com/2013-investment-bankin... http://www.businessweek.com/news/2012-09-13/goldman-sachs-stops-giving-two-year-contracts-to-junior-bankers http://www.businessweek.com/news/2012-09-13/goldman-sachs-st...
    - rayiner 13y ago
      How is "120-130K all in for top bucket in 2013" different from what I said (average just over $100k)? I'm thinking average at GS/MS/JPM for first years was ~$110k, no? As for Goldman, I'm aware they're getting rid of the contract, but it's still standard practice in the industry as a whole. Also, just because the contract is going away doesn't mean "up or out" is going away. At the end of the day you have to weight those high salaries for more senior bankers against the fact that the recruiting model of investment banks involves only a fraction of new hires making it even past a few years.
      - ajiang 13y ago
        Just over 100k and 130k or $160k (Moelis) makes all the difference for what the parent comment said, which is that bonus is is 100-125% of base (65k)
Lavery 13y ago
The other miss with that same quote is the implication that average salary is the same as average comp. In addition to the base salary, junior bankers typically expect to take home large bonuses--in a good year, sometimes 100% or more of their base salary. While I'm not as familiar with the tech sector, my understanding is that they don't have similarly structured bonuses.
- deleted 13y ago
  [deleted]
cdcarter 13y ago
So you're making the point even stronger. Tech pays better. IB is making concessions to make it more appealing.
deleted 13y ago
[deleted]

by jsun 13y ago

refurb 13y ago

The difference is the long-term compensation potential. There are many jobs you can take as a fresh undergrad that will pay you what a investment banking job will. However, there are very few jobs that will pay you $1M+ after 10 years of experience.

rayiner 13y ago
The key word there is "potential." You have to account for the fact that due to the "up or out" system, most people will never be there long enough to earn $1m+. Now that Google and similar companies are breaking through the "low $100k" salary ceiling that used to be common in tech, you really have to compensate for the probability of lasting long enough in a bank (or being able to exit to PE/VC/HF) in order to earn those really high salaries.
- refurb 13y ago
  I don't disagree. However, investment banking is a relatively low risk way to a multi-million dollar salary. You stand a far greater chance of surviving the up-or-out than striking it rich through a start-up.

chrisgd 13y ago

The salary is just base. Bonus is probably 100-250% of base, and a lot of times the 100% part is guaranteed. Just for comparison sake.

rayiner 13y ago
Not for junior analysts, and not in this economy. Average base + bonus seems to be just over $100k for junior IB analysts at GS/MS/JPM this year, pushing to just over $200k after a few years. After that, the banker starts to pull away rapidly, and can earn the 100%+ bonuses. But on the flip side, you can probably still expect to have a job at Google in a few years, but the standard for investment banks is a 2 year contract after which only the best analysts are retained.
- ajiang 13y ago
  Nope. 120-130K all in for top bucket in 2013, with some firms paying 140-160K (see BAML and Moelis). Also not true is the 2 year contract, as GS is moving towards a career model and away from a 2 year analyst model. http://www.mergersandinquisitions.com/2013-investment-banking-bonuses/ http://www.mergersandinquisitions.com/2013-investment-bankin... http://www.businessweek.com/news/2012-09-13/goldman-sachs-stops-giving-two-year-contracts-to-junior-bankers http://www.businessweek.com/news/2012-09-13/goldman-sachs-st...
  - rayiner 13y ago
    How is "120-130K all in for top bucket in 2013" different from what I said (average just over $100k)? I'm thinking average at GS/MS/JPM for first years was ~$110k, no? As for Goldman, I'm aware they're getting rid of the contract, but it's still standard practice in the industry as a whole. Also, just because the contract is going away doesn't mean "up or out" is going away. At the end of the day you have to weight those high salaries for more senior bankers against the fact that the recruiting model of investment banks involves only a fraction of new hires making it even past a few years.
    - ajiang 13y ago
      Just over 100k and 130k or $160k (Moelis) makes all the difference for what the parent comment said, which is that bonus is is 100-125% of base (65k)

Lavery 13y ago

The other miss with that same quote is the implication that average salary is the same as average comp. In addition to the base salary, junior bankers typically expect to take home large bonuses--in a good year, sometimes 100% or more of their base salary. While I'm not as familiar with the tech sector, my understanding is that they don't have similarly structured bonuses.

deleted 13y ago
[deleted]

cdcarter 13y ago

So you're making the point even stronger. Tech pays better. IB is making concessions to make it more appealing.

deleted 13y ago

[deleted]