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Investment Banking Analyst Salary Guide

Average base and bonus investment banking salaries for IB analysts in their first, second and third years in the investment banking industry in New York and London

Investment banking analysts are typically hired straight out of college into a two year program, that sometimes extends to a third year.  The investment banking analyst salary is comprised of a base and a bonus.

For a first year investment banking analyst in New York City the base salary is $85,000, and most analysts will receive a year end bonus in the range of $65,000-$75,000. Absolute top performers will get a bonus as high as $85,000.

The all in comp for most 1st year analysts thus comes to around $160,000.

Below is a table summarizing average compensation for 1st year, 2nd year and the increasingly rare 3rd year analyst.

Investment banking analyst salary (New York)

Position Base Salary Bonus All-In Comp
1st Year Analyst
  • $85,000 is "standard" at bulge bracket investment banks
  • Lower at smaller regional middle market firms
  • Some elite boutiques are starting at $95,000
  • Some might give a signing bonus anywhere from $0-$10,000
  • Low: $65,000
  • Mid: $75,000
  • High: $85,000
$150,000-$170,000
2nd Year Analyst
  • Second year usually increments up by $5,000
  • $90,000 is "standard" at bulge bracket
  • Low: $75,000
  • Mid: $85,000
  • High: $95,000
$160,000-$180,000
3rd Year Analyst
  •  $95,000 is standard at bulge brackets
  • Low: $75,000
  • Mid: $95,000
  • High: $105,00
$170,000-$210,000


A note on the stub year:
Analysts arrive in the summer after completing undergrad.  Traditionally investment banking analysts get their first year bonus a full 12 months after arriving and don't switch to calendar year bonuses until they are promoted to associate ("a to a").  However, firms are increasingly switching to the "stub year" model for IB analysts, to reset their bonuses to a December calendar year end.  In this case analysts get a small stub at the end of their first calendar year (usually $25,000-$30,000 just 5 months after arriving), with the next bonus coming 12 months later.

Investment banking analyst salary in London

Investment Banking analyst salaries in London are lower than in NYC.  As is the case in the United States, there is a standard base: In London, almost all firms currently offer a £50k base, growing to £55k and £60k for 2nd and 3rd year analysts, respectively. Salary is comparable to London after adjusting GBP to EUR in smaller financial hubs in Europe such as including Switzerland, Frankfurt and Zurich.

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Position Base Salary Bonus All-In Comp
1st Year Analyst
  • £50,000 is the "standard"
  • Some give a signing bonus up to £5,000
  • Low: £30,000
  • Mid: £35,000
  • High: £40,000
£80,000 - £90,000
2nd Year Analyst
  • £55,000
  • Low: £30,000
  • Mid: £45,000
  • High: £60,000
£85,000 - £115,000
3rd Year Analyst
  • £60,000
  • Low: £50,000
  • Mid: £60,000
  • High: £70,000
£110,000 - £130,000

What determines the size of the investment banking analyst bonus

There are 4 factors that determine the size of the year end bonus:

Factor 1: Performance vs. other analysts in the group  

Analysts are typically placed into 3 buckets of performance. The absolute top performers get 100% of their base as a bonus (and in some rare cases even 105% of base), while the weakest analysts will receive 70% of base at most firms.  At many firms, placing at the bottom of the group is also a not-so-subtle indicator that you will not be promoted to associate down the road.  How analysts rank relative to others in the group - as opposed to how they rank relative to other groups or across other firms, is therefore the most important indicator of the career prospects within the firm.

Factor 2: The success of the group

Investment banks organize their groups primarily around industries ("coverage") and compete with other firms based on how many deals they closed within each industry.  If an analyst is in an industry group that has closed a lot of deals and brought in a lot of revenue for the bank, the bonus pool for that group will be larger than for less successful groups.

Top performing IB groups by global deal volume through 9/19 (Source: FT)

Factor 3: Success of the firm

At the end of each year, investment banks set aside a % of the revenue generated by the firm for employee compensation.  The better a firm does, the larger the overall bonus pool becomes and the happier everyone gets.  When, on the other hand, a firm's revenue is lagging, they have to make the decision about whether to cut bonuses and face possible defections.

Top investment banks, by M&A deal volume, first half 2019 (source: Bloomberg)

Factor 4: The type of firm

Not all investment banks are the same. Some work on multi billion dollar deals and exist within a massive global financial institution (bulge bracket firms like Goldman Sachs, Morgan Stanley and JP Morgan), others work on equally massive deals but focus solely on investment banking M&A advisory (elite boutiques like Evercore, Lazard and Guggenheim).  Still others are focused on the middle market. While you can slice these in a variety of ways, compensation is generally fairly well defined at the most "elite" firms:

  • Elite Boutiques - Generally pay the most.  For example, while the standard first year analyst base is currently $85,000, some (but not all) elite boutiques have started offering $95,000 for new analysts.
  • Bulge Brackets & Elite Middle Market Investment Banks - These firms are all generally clustered around the same base comp for analysts, with bonus variation based on the factors we described above.
  • Regional middle market investment banks - These firms tend to be on the lower end of the comp scale, but still fairly close in order to stay competitive in the recruiting process.  Firms that cannot afford the high base and comp generally make up for it with a much better lifestyle (i.e. fewer hours).

Investment Banking Career Path

As banks increasingly struggle to retain analysts who opt for private equity (despite the more relaxed dress code), fewer analysts are staying through their second year, let alone the third year.  Increasingly, analysts that do stay are getting promoted directly to associate (going "A to A") after two years.

As an associate, compensation rises significantly. The next level up is Vice President, which can make upwards of 500k. Highest on the food chain is the Managing Director, who makes anywhere from 500k to several million dollars.

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