A new salary survey suggests junior banking staff had plenty to celebrate in this year's bonus round.
First year analysts in corporate finance and debt capital markets divisions (DCM) received bonuses that were three times greater than in 2005, while second and third year associates in both divisions saw their bonuses rise nearly 100%.
Andrew Morland, manager at recruitment firm EM Financial Services, which carried out the survey, says demand for junior corporate financiers remains strong and that banks are increasingly prepared to pay generously in order to recruit and retain them: "In exceptional cases, guaranteed compensation is being offered to secure hires. Counter offers are becoming the norm."
In DCM, Morland says there was significant demand for junior staff in the first half of 2005, which encouraged banks to be generous in order to recruit and retain scarce talent. With most junior DCM positions filled, he says the focus for 2006 will be on adding staff with five or more years' experience.
First year associates buck the upwards trend
The bad news is that first year associates, many of whom join banks after completing MBAs, appear to have done less well from the most recent bonus round. In both DCM and corporate finance, they saw the combined value of their sign-on and end of year bonuses fall 30% or more.
However, Morland says this may be down to the people who participated in the survey, rather than any real curtailment of associates' pay. "It could be a bit misleading, this year's associates might be working in a different tier of bank," he muses.
Altogether, the survey covered 200 corporate financiers and 100 debt capital markets bankers.
Corporate finance salaries and bonuses 2006
1st year analyst: Salary: 35k-38k; bonus: 18k-35k
2nd year analyst Salary: 40k-44k; bonus: 31k-49k
3rd year analyst Salary: 47k-49k; bonus: 40k-59k
1st year associate Salary:55k-58k ; bonus 17k-23k, plus 6k-12k sign on bonus
2nd year associate Salary:58k-64k; bonus: 98k-149k
3rd year associate Salary: 60k-70k; bonus: 120k-230k
Debt capital markets salaries and bonuses 2006
Junior analyst Salary: 30k-42k; bonus 5k-25k
Senior analyst Salary: 40k-50k; bonus 12k-48k
Junior associate Salary: 45k-60k; bonus 22k-60k, plus 5k-20k sign on bonus.
Senior associate Salary: 55k-70k; bonus 30k-100k