Becoming an investment banking analyst is undeniably a lucrative career option. The Investment Banking Analyst is an entry-level position. Their job is critical, like developing financial models, preparing marketing materials, suggesting and facilitating large financial transactions, and managing the investment deal impeccably. Their job is critical, like developing financial models, preparing marketing materials, and managing the investment deal impeccably. Investment banking analysts need a combination of technical skills and soft skills to fulfill critical responsibilities. Therefore, despite being in a junior-level role, they get a high-salary paycheck.

Salary is an important determinant in making a career choice. If you wish to know the investment banking analyst remuneration details, here is a comprehensive guide.

Investment Banking Analyst: Salary Structure

· As an investment banking analyst, your salary range will depend on many important factors:

· Your education levels

· Your certifications

· Additional Skills

· Experience or number of years you spent in the profession.

Unlike the U.K., investment banking analyst salaries in the U.S. follow the standard base. The investment banking analyst's salary is composed of the:

1. Base Salary: This salary component stays the same all year.

2. Stub Bonus: When you start working in the middle of the calendar year, you may receive a stub bonus for the initial few months on the job. This is usually between 20-30%.

3. End-of-Year Bonus: This is paid after a full year of work. Investment banking analysts get their bonus after completing 12 months in the company. Depending on the job level, some companies follow a calendar-year bonus pattern.

4. Signing Bonus: The analysts who graduate and get full-time offers receive a signing bonus. This is usually between $5,000 to $10,000.

5. Deferred and stock bonus: Though this one is for the associates' level, some companies have also offered the same to analysts. The analysts may get a bonus in stock that vests over the years.

6. Other benefits: These include health insurance, vacation days, retirement plans, profit-sharing plans, etc.

In the first year of the investment banking analyst, the base salary remains around $85,000. They also receive a year-end bonus of around $45,000. Some top performers get a much higher bonus of more than $60,000. So, the total compensation for the beginner-level is between $130,000 to $160,000.

Top investment banks like Goldman Sachs, JPMorgan, Morgan Stanley, Citi, Barclays, Credit Suisse, UBS, etc. pay even higher. The typical salary range for investment banking analysts at these top U.S. investment banking firms is between $ 150k and $220k. While the less experienced or first-year analysts get a lower pay range, the analysts in their second year get the higher. Depending on the company's growth and last year's financial figures, they offer paychecks to their employees.

 Read More: Investment Banking Certificate

Top Factors Determining the Bonus Amount

Know how to increase your bonus amount to make your salary check heftier. Here are the factors that determine the size of your bonus:

Performance

Compared to the other analysts in the firm, how is your performance? Most companies follow a bucket performance system. For example, the top performers may get a 70% to 100% bonus of their base salary. Some companies introduce multipliers to motivate the analysts and reward them with 110% and higher. Low-performing analysts receive a bonus of around 30% to 50% of their base salary. Those remaining at the bottom are unlikely to be promoted to the associate level. So, consistently high performance is the most important factor in growing and receiving.

Industry Group

Investment banks make industry groups that compete with other firms. The group that closes more deals and brings significant revenue to the bank is eligible for a high bonus. Hence, the more your group performs, the more your pay is.

Company Success

The investment banks decide the staff compensation based on the revenue they generate. The better a company performs, the higher its revenue, and the more the employees share. You can expect a larger bonus pool if the firm's revenue is surging. However, if the firm is not doing well, they might also cut bonuses and downsize the staff!

Company Type

While some investment banks work on multi-billion-dollar deals and are big global financial institutions, some are small investment banks focused on the middle market. The compensation also depends on whether the company is one of the elite firms or a small-size company. The big firms pay the most, and the small investment banks offer lesser compensation. However, they also try to stay competitive in recruiting and offer better to experienced analysts.

Wrapping up

The Investment Banking Analyst position is a coveted job. Not everyone can take a grueling investment banking job, considering the lengthy hours of work. But huge monetary benefits and incredible growth in the investment banking career path inspire students and professionals to embark on this journey!