Table of Contents
Sales and Trading Compensation
A sales and trading has a similar comp structure to investment banking, comprised of a base and a bonus. For a sales & trading “Analyst 1” (an analyst’s first full year after completing the July-December “stub” period), base and bonus comp is as follows:
- Base: $85,000 is the industry standard at most bulge bracket investment banks
- Bonus: $50,000-$75,000
As a result, a sales & trading analyst will take home all-in comp of $135,000-$160,000 in their first full year.
Below is a table summarizing average compensation for 1st year, 2nd year 3rd year analyst.
| Position | Base Salary | Bonus | All-In Comp |
|---|---|---|---|
| Analyst 0 (Stub year) |
|
|
NM due to stub period |
| Analyst 1 (Jan-Dec) |
|
|
$135,000-$160,000 |
| Analyst 2 (Jan-Dec) |
|
|
$145,000-$170,000 |
A note on the stub year: New Hire S&T Analysts and Associates arrive in the summer after completing undergrad.
Most Investment Banks pay the majority of their staff bonuses on a calendar year cycle (January – December) that matches their annual results. Investment Banking Analysts are the exception as many are on a two year program and many intend to leave. Investment Banking analysts are typically paid on a 12 month cycle based on their hire date (but varies by banks).
A New Hire Analyst is typically hired in the summer, goes through new hire training, then takes their FINRA Exams (Series 7, 63) and are usually on their desks by Labor Day. Year end reviews are typically due in October and evaluation committees begin in November. The New Hire Analyst doesn’t have enough time on the desk to rank them versus their peers and differentiate their comp. Instead, all the new hires are given a standard stub bonus in January/February alongside the bonuses everyone else on the desk is receiving.
Sales & Trading Associate Salary (New York)
Most Sales & Trading Associates are promoted from the analyst program. For new hires joining as Associates (typically either Research or Quants from a PhD program) they have an stub year just like Analysts which we’ve termed “Associate 0”
A sales & trading “Associate 1” (first year for associates promoted to analysts and for new hires full year after completing the July-December stub period), base and bonus comp is as follows:
- Base: $125,000 is the industry standard at most bulge bracket investment banks
- Bonus: $90,000-$130,000
As a result, the first year sales & trading analyst will take home all-in comp of $240,000-$270,000, with second year comp .
Below is a table summarizing average compensation for stub year, 1st year and 2nd year associates.
| Position | Base Salary | Bonus | All-In Comp |
|---|---|---|---|
| Associate 0 (Stub yearfor new hires) |
|
|
NM due to stub period |
| Associate 1 |
|
|
$240,000 – $270,000 |
| Associate 2 |
|
|
$275,000 – $390,000 |
Sales & Trading Vice President Salary (VP)
The base compensation for a sales & trading VP closely tracks investment banking VP’s. However, starting at the vice president level and above, there is a larger variation in compensation levels, much more so than in investment banking. As a VP in sales and trading, you are expected to have a number next to your name (Trading P&L or Sales Credits), whereas a VP in investment banking could still be focused on execution as opposed to revenue generating activities such as originating and sourcing clients. In addition, S&T VP comp can vary significantly between various desks. For example, the average VP in Rates Options Trading makes much more than the average VP in Cash Equities.
What Drives Sales & Trading Bonuses?
- Individual performance
- Desk performance
- Broader line of business performance
In Sales & Trading, your direct performance and your group’s performance directly impacts your pay. That contrasts with Investment Banking where most Associates and VPs are focused on pitchbooks and execution and do not have a client list and P&L next to their name.
Getting the white envelope
Bonus Time!
Every year, at the end of the calendar year, your performance is ranked against your peers. At the beginning of the year, typically right after the bank’s financial results are released, everyone gets their bonus numbers. At my firm, they arrived in white 8 1/2 by 11 sized envelopes with our names on a label. Inside was one sheet of paper. It starts off by what you salary was last year, what your bonus was last year. What your salary was this year and what your bonus is this year. If you got promoted, that was when it was official.
On bonus day, I would keep one eye on my Bloomberg chats, and one eye looking for someone from HR walking with a stack of white envelopes. I had a number of different managers each year, and each year I tried to figure out their approach on order. Was it most junior to most senior, was it most senior to most junior, was it by last name in alphabetic order? Now that the bonus envelopes have arrived, I would keep one eye on my Bloomberg chats and one eye on people coming and going.
How did they look? Were they happy or defeated? Most people spent the afternoon getting coffees with each other, talking about how their numbers were and what they felt. No one would schedule client entertainment that night, everyone went with colleagues to the bar at 5pm and celebrated if you were happy, a numbed the pain if you were sad.
