It's been a good year to be a junior banker. Analysts' bonuses were paid in July/August and were huge. Associates won't be so lucky.
With the dust now long settled on bonuses handed out to analysts in investment banking in the summer, it's possible to get a clearer perspective on how generous they were - and the numbers emerging from the fug suggest they were very generous indeed.
According to Jim Nairn at recruitment firm The Cornell Partnership, and one mid-ranking associate at a US house, just six months ago US banks handed out bonuses to first year analysts that were equivalent to as much as 149% of base salaries, with the average around 120%.
That means that the average fresh-from-university first year IB analyst in a top US bank will take home around 83k for 2007.
Will the associates, who are four years senior to analysts, frequently endowed with MBAs, and infinitely more familiar with the intricacies of financial modelling, be subject to similar generosity? Ahem, no.
Since analysts cashed- in back in August, there's been the little issue of the credit crisis. The (senior) associate we spoke to predicts first-year associates are on track for bonuses averaging 135% to 140%, giving them total comp of around 136k.
This is down on last year, when bonuses for junior associates ranged from 150% to 180% according to our two sources.
"The disparity between good performers and mediocre performers [at associate level] is going to be exceptional this year," says Nairn. "Associates are still going to get paid, it just won't be anything like what they're expecting."