Investment Banking Compensation Explained: Base, Bonus, Stub, and Total Comp by Level

First-year analysts at bulge bracket banks made $110,000 base salary in 2024. With bonus, total comp approached $200,000.

That's the headline number. But compensation in banking is more complicated than a single figure suggests. Base salary, year-end bonus, stub bonus, signing bonus, overtime (at some banks)—the components interact in ways that aren't obvious until you're living it.

This guide breaks down how investment banking compensation actually works. What you earn at each level. How bonuses are determined. What the numbers really mean after taxes. And how comp varies across firm types and geographies.

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The Components of Compensation

Base Salary

Your guaranteed pay. Arrives in your bank account every two weeks (or monthly, depending on the firm). This is the number you can count on.

Base salaries are largely standardized across bulge brackets. When one bank raises base, others follow within weeks. The industry moves in lockstep.

Current base salaries (2024):

Level	Base Salary
Analyst 1	$110,000
Analyst 2	$125,000
Analyst 3	$135,000
Associate 1	$175,000
Associate 2	$200,000
Associate 3	$225,000
VP	$250,000-$300,000
Director/SVP	$300,000-$400,000
Managing Director	$400,000-$600,000

These figures are for bulge bracket banks in New York. Elite boutiques pay similarly. Middle-market and regional banks pay less.

Year-End Bonus

The variable component. Paid once per year, typically in January or February for the prior year's performance.

Bonuses depend on three factors:

1. Bank performance. Did the firm have a good year? Revenue up or down?
2. Group performance. Did your specific group perform well?
3. Individual performance. How did you perform relative to peers?

At junior levels, bank and group performance dominate. Individual performance matters more as you become senior.

Typical bonus ranges (2024):

Level	Bonus Range	Total Comp Range
Analyst 1	$80,000-$110,000	$190,000-$220,000
Analyst 2	$100,000-$140,000	$225,000-$265,000
Analyst 3	$110,000-$160,000	$245,000-$295,000
Associate 1	$100,000-$175,000	$275,000-$350,000
Associate 2	$125,000-$200,000	$325,000-$400,000
Associate 3	$150,000-$225,000	$375,000-$450,000
VP	$200,000-$400,000	$450,000-$700,000
Director/SVP	$300,000-$600,000	$600,000-$1,000,000
MD	$500,000-$2,000,000+	$900,000-$2,500,000+

The ranges are wide for a reason. A first-year analyst at a struggling group in a bad year might get $80K. The same analyst at a hot group in a boom year might get $110K+.

Stub Bonus

Here's where it gets confusing.

Most analysts start in July or August. But bonus cycles run January to December. So your first bonus covers only part of a year—the "stub period."

How it works:

• You start in August 2024
• Your first full bonus (paid January 2026) covers all of 2025
• But what about August-December 2024?
• Some banks pay a "stub bonus" in early 2025 for those months
• Others roll it into your first full bonus
• Some pay nothing for the stub

The math:

If you start in August and the full-year analyst bonus is $100K, a prorated stub bonus would be roughly $40K (5 months / 12 months × $100K).

In practice, stub bonuses are often smaller than pro-rated math suggests. Banks know you have leverage to negotiate full-time offers, not stubs.

Signing Bonus

A one-time payment when you accept an offer. Meant to lock you in.

Typical amounts:

• Analyst: $10,000-$25,000
• Associate (post-MBA): $30,000-$50,000

The catch: Signing bonuses usually must be repaid if you leave within 12-24 months. Read the fine print.

Relocation Bonus

If you're moving for the job, banks often cover moving costs.

Typical amounts: $5,000-$15,000

Some banks reimburse actual expenses. Others provide a lump sum. Either way, it's taxable income.

Overtime (At Some Banks)

After lawsuits and regulatory scrutiny, some banks now pay overtime to analysts.

How it works:

• Analysts are classified as non-exempt employees
• Hours beyond 40/week are tracked
• Overtime paid at 1.5x hourly rate

The reality: Not all banks do this. Some reclassified analysts as exempt after initial changes. Where overtime exists, it can add $20K-$50K+ annually given the hours worked.

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The Bonus Process

How Bonuses Are Determined

Bonus decisions involve multiple layers:

Bank-wide pool. Senior leadership decides the total bonus pool based on firm performance. In a bad year, the pool shrinks. Everyone feels it.

Group allocation. Each group gets a share of the pool based on revenue contribution and strategic importance. Hot groups get more.

Individual allocation. Within groups, MDs and senior VPs rank employees and allocate accordingly. Your direct reviews matter here.

The Ranking System

Most banks use some form of ranking:

• Top bucket: Top 10-20% of performers. Maximum bonus.
• Middle bucket: Majority of employees. Standard bonus.
• Bottom bucket: Underperformers. Reduced bonus or managed out.

At junior levels, the spread between buckets isn't enormous—maybe 20-30%. At senior levels, the spread widens dramatically.

The Conversation

Bonus communication varies by firm:

The formal meeting: Some banks have structured conversations. Your manager explains your rating and bonus amount. You can ask questions.

The drive-by: Other banks barely explain. You get a number. Maybe brief feedback. That's it.

The email: Some firms just send numbers electronically. Impersonal but efficient.

Negotiating Bonuses

Can you negotiate your bonus?

At junior levels: Rarely meaningful. Numbers are largely standardized. Pushing back risks looking tone-deaf.

At senior levels: More room. MDs with leverage can negotiate. Threatening to leave (credibly) can work. But it's playing with fire.

The better approach: Focus on performance. The best bonus negotiation happens throughout the year, not in the bonus meeting.

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Compensation by Firm Type

Bulge Bracket Banks

Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America, Citi, Barclays, UBS, Deutsche Bank.

Characteristics:

• Standardized base salaries (they move together)
• Bonuses tied to firm and group performance
• Most transparent compensation (most data available)

2024 total comp (typical):

Level	Total Comp
Analyst 1	$190,000-$220,000
Analyst 2	$225,000-$265,000
Associate 1	$275,000-$350,000

Elite Boutiques

Evercore, Centerview, Lazard, Moelis, PJT Partners, Perella Weinberg.

Characteristics:

• Often match or exceed bulge bracket comp
• More variable—hot groups can pay significantly more
• Smaller bonus pools can mean more volatility

2024 total comp (typical):

Level	Total Comp
Analyst 1	$200,000-$250,000
Analyst 2	$250,000-$300,000
Associate 1	$300,000-$400,000

Top groups at top boutiques can exceed these ranges meaningfully.

Middle-Market Banks

Jefferies, William Blair, Piper Sandler, Baird, Harris Williams.

Characteristics:

• Lower base salaries (often $10-20K less)
• Smaller bonuses
• More variation between firms

2024 total comp (typical):

Level	Total Comp
Analyst 1	$150,000-$180,000
Analyst 2	$175,000-$220,000
Associate 1	$225,000-$300,000

The gap from bulge brackets is real but not enormous. Lifestyle may be modestly better.

Regional and Boutique Banks

Smaller, often specialized firms.

Characteristics:

• Significantly lower comp
• More variable—some pay surprisingly well, others don't
• Less standardization

2024 total comp (typical):

Level	Total Comp
Analyst 1	$100,000-$150,000
Analyst 2	$130,000-$175,000
Associate 1	$175,000-$250,000

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Geographic Variation

New York

The standard. Most comp data assumes NYC.

Cost of living is high. But so is pay. Most banks don't adjust base for NYC—it's already assumed.

San Francisco

Tech-focused groups often pay NYC rates or close to it. Cost of living is comparable (or higher).

Other US Cities

Chicago, Houston, Charlotte, Atlanta—bases are sometimes 5-15% lower than NYC. Bonuses may also be smaller.

But cost of living is significantly lower. Net purchasing power can be comparable or better.

London

Typically 10-20% lower than NYC in dollar terms. But the gap has varied with exchange rates.

UK tax rates are comparable to NYC (when including state and city taxes). Cost of living is high but not quite NYC level.

Hong Kong / Singapore

Historically competitive with NYC, sometimes higher (especially when tax advantages are considered).

Housing is expensive. But lower tax rates can make net comp higher.

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What You Actually Take Home

The Tax Reality

Gross compensation ≠ take-home pay. Taxes take a large bite, especially in NYC.

Approximate tax rates for a first-year analyst in NYC ($200K total comp):

Tax	Approximate Rate
Federal income tax	~24% marginal
State income tax (NY)	~6.5%
City income tax (NYC)	~3.5%
Social Security/Medicare	~7.65%
Effective total	~35-40%

The math:

• Gross: $200,000
• Taxes (estimated): $70,000-$80,000
• Net: $120,000-$130,000

That's still a lot. But it's not $200K.

Bonus Timing Matters

Bonuses are paid in Q1. The IRS doesn't care that you "earned" it over the prior year. It's income in the year you receive it.

Why this matters:

• Your first calendar year income is lower (partial year + no bonus yet)
• Your second calendar year income spikes (full salary + first bonus)
• Tax withholding on bonuses is often higher than necessary (supplemental wage rate)
• You may get a refund, or owe more, depending on your full-year picture

Deferred Compensation

At senior levels (typically VP and above), some compensation may be deferred.

How it works:

• A portion of bonus is paid in stock or deferred cash
• Vests over 2-4 years
• Forfeited if you leave early

Why banks do it: Retention. Senior people are expensive to replace.

The catch: You're exposed to the firm's stock performance. And you can't spend unvested money.

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Compensation Trends

The Long-Term Arc

Banker comp has increased substantially over time:

Year	Analyst 1 Base	Analyst 1 Total (Est.)
2015	$85,000	$140,000-$160,000
2018	$85,000	$150,000-$170,000
2021	$100,000	$175,000-$200,000
2024	$110,000	$190,000-$220,000

Base jumps happen in waves. 2021 saw a major increase after years of stagnation.

Cyclicality

Bonuses are cyclical. They follow deal activity and bank profitability.

Good years (2021, for example):

• Record deal volumes
• Banks highly profitable
• Bonuses at top of ranges
• Special bonuses to retain talent

Bad years (2008-2009, 2022-2023):

• Deal activity down
• Banks cut costs
• Bonuses at bottom of ranges
• Layoffs happen

The base is stable. The bonus swings. Plan your finances accordingly.

Inflation Adjustment

Comp has grown faster than inflation over the long term. But it doesn't feel that way when rent in NYC grows faster than your bonus.

The 2021-2022 base increases were partly catch-up for years of flat pay during inflation.

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Common Questions

"Is compensation negotiable at the offer stage?"

For analysts: Minimally. Banks make standardized offers. Pushing too hard looks bad.

For associates: Slightly more room, especially with competing offers.

For laterals: Most negotiable. Your market value is clearer.

"How much does group matter for comp?"

A lot. Hot groups (M&A, Sponsors, certain sectors in good years) get larger bonus pools. Being in the right group can mean 20-30%+ higher bonus.

But you can't always choose your group. Staffing needs and timing matter.

"Do top performers really make more?"

At junior levels, the spread is modest. Top-bucket analysts might make 10-20% more than middle-bucket.

At senior levels, the spread is enormous. Top MDs can make multiples of average MDs.

"What about hours worked vs. compensation?"

The implied hourly rate is humbling.

The math:

• $200K total comp
• 80 hours/week × 50 weeks = 4,000 hours
• $200K / 4,000 = $50/hour

That's good. But it's not as impressive as the headline comp suggests. A well-paid nurse or electrician might earn similar hourly rates with better hours.

The value proposition is: high comp now, better comp later, valuable exit options. Not maximizing current hourly rate.

"Does compensation justify the lifestyle?"

Only you can answer this. The money is real. So are the hours. Whether the trade-off works depends on your priorities, alternatives, and time horizon.

Some people gladly make the trade. Others realize they'd be happier earning less elsewhere. Both are valid.

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Compensation Over a Career

The Trajectory

Banking compensation compounds over time:

Years	Title	Total Comp Range
0-3	Analyst	$190,000-$300,000
3-6	Associate	$275,000-$450,000
6-9	VP	$450,000-$700,000
9-12	Director/SVP	$600,000-$1,000,000
12+	MD	$1,000,000-$3,000,000+

These are wide ranges. Geography, firm, group, and individual performance all matter.

The MD Math

Managing Directors are where compensation gets interesting.

Base: $400K-$600K (relatively stable)

Bonus: $500K-$2M+ (highly variable)

• Depends heavily on personal revenue generation
• Top rainmakers at elite boutiques can earn $5M+
• Struggling MDs might earn $700K total
• Average is probably $1.2-1.5M at bulge brackets

Lifetime Earnings

A full career in banking (analyst to MD, 20+ years) can generate $15-25M in cumulative earnings.

The reality check: few people spend full careers in banking. Most exit earlier—to PE, hedge funds, corporate roles, or other paths. Banking comp is often a stepping stone, not a destination.

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The Bottom Line

Investment banking compensation is high. First-year analysts at major banks earn $190K-$220K. MDs can earn $1M-$3M+. The numbers are real.

But compensation is more complex than headlines suggest:

• Base is stable; bonus is variable. Don't count on top-of-range bonuses every year.
• Taxes take a big bite. NYC total tax burden is 35-40% for high earners.
• Stub periods are confusing. Your first "bonus" is likely prorated.
• Firm and group matter. Being at a hot group in a good year beats being at a struggling group in a bad year.
• Hourly rates are humbling. Divide total comp by hours worked before celebrating.

The money is good. It gets better with seniority. And it opens doors to even more lucrative paths in private equity and hedge funds.

But it comes with trade-offs. The hours are brutal. The lifestyle demands are real. The stress is constant.

Whether that trade-off makes sense depends on what you value. The compensation is the compensation. What you do with it—and what you sacrifice for it—is up to you.