Jul 2, 2021
Wall Street bids up junior banker salaries in battle for talent
Barclays, Citigroup Boost Staff Retention Offers
A full-scale bidding war has broken out on Wall Street, this time over young bankers, as firms struggle to attract and keep talent after the pandemic added to famously crushing workloads.
Citigroup Inc. became the latest bank to lift base salaries to US$100,000 for its first-year analysts on Friday. It’s a figure Barclays Plc, JPMorgan Chase & Co. and Guggenheim Partners have also offered bankers at that level, as Wall Street more broadly tries to stem defections sparked by a deluge of deals amid the work-from-home grind.
The salary bumps may force other banks to step in line -- or risk losing out on top recruits, according to consultants and compensation experts. At bulge bracket firms, the standard base salary for a first-year analyst is about $85,000, according to estimates from Wall Street Prep, which provides courses and training for some of the biggest investment banks.
“There’s a lot of competition for the best people,” said Alan Johnson, managing director of the Wall Street compensation consultancy Johnson Associates. “I think everyone is going to be moving to US$100,000 now.”
Other banks have announced pay hikes, one-time bonuses, all-expenses paid vacations or offered sleek fitness equipment to their junior rungs, in a bid to ease the recent pressures. The issue rose to the fore earlier this year when a presentation from a group of Goldman Sachs Group Inc. analysts shed light on their 100-hour weeks and declining physical as well as mental health as market activity reached fever pitch.
“I could imagine that other banks will follow this in order not to be seen as far off market,” Anthony Keizner, a managing partner at the recruiting firm Odyssey Search Partners, said of the recent pay hikes. “In a competitive environment, the last thing you want to be known as is the under payer.”
Here’s a list of how banks are compensating their junior employees.
- Barclays: The London-based bank will lift base salaries of all U.S. analysts by US$15,000 and its U.S. associates and vice presidents by US$25,000. Under the changes, first-year analyst salaries will rise to $100,000.
- JPMorgan: The biggest U.S. lender is offering first-year analysts starting salaries of US$100,000.
- Guggenheim: The bank increased first-year analyst salaries to US$100,000 from US$85,000 in May, according to a person familiar with the matter, who asked not to be identified discussing a private matter.
- Citigroup: The lender raised first-year analyst base pay to US$100,000, a person familiar with the matter said, under a plan to hike salaries for program vice presidents, analysts and associates in the range of US$15,000 to US$25,000.
- Bank of America: In April, the bank said it would give junior investment bankers a US$10,000 boost. A representative for the lender declined to disclose what those employees make now.
- Goldman Sachs: A representative for the bank declined to comment on any pay plans. The bank has vowed to accelerate hiring of new junior bankers and to enforce its so-called Saturday rule, where such staff shouldn’t be in the office from 9 p.m. Friday to 9 a.m Sunday.
- Morgan Stanley: A representative declined to comment on any pay measures.
- Moelis & Co.: The boutique investment bank provided a US$10,000 one-time allowance for its banking staff, according to a person familiar with the matter, who declined to be identified discussing private information.
- Wells Fargo & Co. and Credit Suisse Group AG: Both banks are giving some junior workers a one-time US$20,000 bonus.
- Jefferies Financial Group: The bank offered junior bankers a selection of fitness perks including a Peloton Interactive Inc. bike, and Apple Inc. products. It’s also adding more junior staff.