Do you want to be an investment banker? It’s a lucrative career, as these professionals are some of the highest-paid for their age. You won’t need years of promotions to earn six figures. What’s the average investment banker salary?
The Base Investment Banker Salary Ranges – Current Figures
The investment banker salary is notoriously high. Even starting salaries (also called first-year analyst salaries) are above $100,000. The base investment banking analyst salary at a bulge bracket bank is between $100,000 and $125,000.
After 2-3 years, analysts will typically get a promotion to associate. The investment banking associate salary ranges from $175,000 to $225,000 per year. And 3-4 years later, they are promoted to vice president. At that level, investment bankers make between $250,000 and $300,000 per year.
So, in just a few years out of college, investment bankers are making well into the six figures. Of course, these are just averages – some make more and some make less. It depends on the bank, the location, and the investment banker’s individual performance. The last level is the managing director, who makes $400,000 to $600,000.
What About Bonuses? The Total Compensation for Investment Bankers
In addition to their base investment banker salary, bankers also get bonuses. The bonus is a large percentage of the investment banker’s total compensation. For analysts, bonuses tend to be around 50% of their salary.
So, if an analyst makes $100,000 in salary, they could make an additional $50,000 in bonus. This can vary, though, based on the investment bank’s profitability and the investment banker’s performance.
Associates tend to have a bonus percentage around 70-100%. For example, an investment banking associate making $175,000 in salary could make an additional $125,000 in bonus, for a total compensation of $300,000.
For investment banking vice presidents, the total compensation can be even higher, at 100% to 200% more than their base salary. So, a VP earning a base salary of $250,000 could make $500,000 in total, or more. Managing directors can make well over a million.
Investment Banker Salaries over the Years
The investment banker salary has been on the rise in recent years. This is partly due to an increase in demand for their services and partly due to the fact that investment bankers are getting paid more to take on greater risks.
For example, in the middle of 2021, many banks increased base salaries for investment banking analysts from $85K – $95K to $100K – $110K. The salary progression for associates has also increased from $150K – $200K to $175K – $225K.
When base salaries are raised, year-end bonuses may decrease. So, investment bankers’ total compensation may not increase as much as it seems. Still, the average salary is high compared to most other professions. And it’s a great way to earn a lot of money right out of college.
What Does an Investment Banker Do?
An investment banker is a financial professional who helps companies raise money by issuing and selling securities. They work in the securities industry. Investment bankers typically work for investment banks (such as Goldman Sachs), large commercial banks, or large securities firms. They help them by:
- coming up with new investment ideas;
- negotiating loans;
- helping to get the best terms for their products.
Investment bankers also help companies raise money by selling stocks and bonds. They work with both public and private companies, but it’s important to distinguish between investment banking and private equity.
What Challenges Do They Face?
An investment banker’s job is very demanding. They work long hours and often have to travel. Investment bankers also face a lot of pressure to perform well. If they don’t, they may be fired.
Is a Career in Investment Banking Right for You?
If you’re interested in a high-paying career in finance, investment banking may be a good option for you. It’s important to understand, though, that it’s a demanding job with long hours and a lot of pressure. Ask yourself these questions:
- Are you prepared to take risks in your career?
- Do you think you’d succeed in discovering new ways to raise money?
- Do you work well under pressure?
- Can you handle long hours and travel?
If you answered yes to all of these questions, investment banking may be a good fit for you. just remember that it’s important to do your research and make sure you’re prepared for the challenges of this career before you pursue it.
How to Become an Investment Banker?
If the investment banker salary looks tempting to you, here’s what you need to do to start a career in this field. First, you need to have at least a bachelor’s degree. Many investment bankers also have a master’s degree in business administration (MBA).
You also need to pass the Series 79 and 63 exams. These are exams that all investment bankers must take in order to become licensed. Finally, you need to have a few years of experience working in the financial industry.
Investment Banker Salaries Are Great Money for Hard Work
The investment banker salary is high compared to most other professions. And it’s a great way to earn a lot of money right out of college. If you’re prepared to take risks, work long hours, and handle a lot of pressure, investment banking may be the right career for you.