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Investment Banking Managing Director Salary (MD)

Average Base and Bonus Salaries for Investment Banking Managing Directors (MDs)

Last Updated October 17, 2023

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Investment Banking Managing Director Salary

Managing directors (MDs) are at the top of the investment banking organizational hierarchy.

MDs are responsible for relationship-building with clients and revenue generation for the firm.

Hence, investment banking is frequently considered a relationship-oriented,
“sales-like” business.

The “all-in” comp for investment banking managing directors (MDs) ranges from just under $1 million to several million dollars.

The compensation is comprised of both a base and bonus component:

Therefore, all-in comp can be anywhere between just under $1 million to $2 million+.

Seasoned MDs can also make significantly more based on the revenue they’ve generated for the firm.

On the other hand, MDs earning significantly less than $1 million at a competitive group in a solid investment bank are considered to be doing poorly.

Bonus Component: Significant Variance in MD Compensation

Unlike more junior staff (analysts, associates) and mid-level staff (VPs and directors), a substantial proportion of the total compensation for managing directors comes in the form of a bonus.

Moreover, the bonus size is largely dependent on how much deal flow was directly brought in by that specific managing director.

To reflect the importance of performance at the MD ranks, Goldman announced a few years ago that it would no longer guarantee its managing directors a minimum salary of $500,000.

Average Managing Director Salary: Investment Bank Tier Considerations

Not every managing director (MD) should expect to get paid this kind of money, as the type of investment bank is one major factor to consider.

Top-tier middle-market firms typically pay lower than the managing director salary ranges at bulge brackets and elite boutiques, yet the amount is still in the same general ballpark.

However, the compensation of MDs can be significantly lower at smaller regional middle-market firms.

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