Salary benchmarking firm Emolument.com highlights that London investment bank analyst salaries are remarkably bunched together, with seven out of 10 banks paying their analysts between £68,000 and £71,000 in annual total compensation last year. There are several reasons for this, but the primary consideration is that the biggest half-dozen or so IBs are all competing for the same top analyst talent, and all the firms work hard to make sure they are offering competitive compensation packages.
Breakdown of London investment bank analyst salaries and bonuses
UBS, Morgan Stanley, Deutsche Bank and Goldman Sachs are all tied at the top of the 2015 analyst pay rankings, paying analysts an average total annual compensation of £71,000. Credit Suisse is right behind, offering analysts an average total pay package of £70,000 a year. HSBC is next with a £68,500 total pay package for analysts, then Barclays at £68,000. JPMorgan pays analysts a total average compensation of £64,000, Citigroup $63,000 and BNP Paribas brings up the back of the pack by only paying its analysts a £56,000 total annual compensation.
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Of note, analyst bonuses are relatively small compared to other positions in investment banking. Analyst bonuses in 2015 only represent 28% total income at the most, compared to 42% for an associate, and above 50% for most managing director compensation packages.
Emolument.com also points out given their policies of paying higher salaries at the analyst level, European banks are dueling with American IBs for the top spots with total paychecks at Euro institutions UBS and Deutsche Bank matching those of U.S.-based Goldman Sachs and Morgan Stanley.
Statement from Emolument.com
In discussing London bank analysts pay, Alice Leguay from Emolument.com comments “With Analysts picking their employer as they would choose an MBA school, a few extra thousand a year is unlikely to sway their desire to work for the bluest-blue chip institutions. Pushing up Analyst pay in order to recruit the best grads might in fact backfire in attracting the most mercenary short-termist individuals. Corporate culture, training & networking, business performance should be the deciding factors, and taking a £1k hit early on in a banking career will pale in comparison with the potential upside of working for a top firm.”