November 28, 2023

Investment Banking

Let Your Investment Banking Do The Walking

Goldman Sachs, JPMorgan lead the pack on record junior banker pay

JPMorgan and Goldman Sachs are the highest-paying investment banks in the City for junior and mid-ranking dealmakers, as entry-level salaries in the sector have swelled by 26% over the past year.

JPMorgan’s first-year salary of £70,000 is the highest among its peers, according to a survey of analyst to vice-president level dealmakers by specialist recruiters Dartmouth Partners. Meanwhile, Goldman’s bumper bonus payouts in 2021 have set it above the competition on variable pay, the data shows.

Entry-level salaries for investment bankers at top firms in the City have risen from £50,000 at this point in 2021 to an average of £63,000, according to the survey. Both Morgan Stanley and Goldman Sachs have also increased entry-level salaries to £70,000 once signing bonuses are taken into account, Financial News previously reported.

READ UBS hikes pay for Wall Street analysts to $110,000

Banks have scrambled to hire and retain junior talent over the past 12 months as a burnout crisis in the ranks has seen up to 70% of some teams depart. The harsh conditions for junior bankers were highlighted in a leaked presentation by a group of Goldman Sachs analysts in March last year that showed how 100-hour weeks were taking a toll on their physical and mental health.

Salaries have spiralled as a result, with Citigroup, Morgan Stanley, JPMorgan, Bank of America and UBS among those to have increased pay at least twice over the past year.

Dartmouth’s research suggests that 33% of the class of 2022 and 35% of those graduating next year expect a salary of at least £61,000 despite having no experience in the industry.

On the next rung of the career ladder, salaries for associates have increased by 14% to an average of £119,000, Dartmouth’s numbers show. This year, average bonuses at this level were £107,000, which is up by 20%.

Goldman Sachs paid out £180,000 for associates on average, the highest of any investment bank. Meanwhile, VPs at the US banking giant were paid bonuses of up to £350,000. Average bonuses at this level among City investment banks were £228,367, up 30% from the prior year.

Associates at Goldman contacted by FN in January, when bonuses were paid, said that total compensation at this level ranged between $400,000 and $500,000 as variable compensation has surged.

While large investment banks are now broadly in line with each other on base salaries for junior bankers, some boutique players have upped the ante. FT Partners, which specialises in fintech deals, offers a starting salary of £85,000, FN reported.

To contact the author of this story with feedback or news, email Paul Clarke