Investment bank: Encyclopedia II - Investment bank - Compensation - UK

Investment bank - Compensation - UK

Investment Bankers receive the highest starting salary of any graduate-level job in the United Kingdom[2] - whilst the average starting salary for graduates in the top 100 AGR blue-chip firms is £23,000[3] (and closer to £15,500 for all graduates according to Prospects.co.uk), investment banking graduates can enjoy a starting salary of £35,000 - on top of this, a £5,000 "golden handshake" is typical, with an end-of-year bonus up to a further £30,000 for some 'front office' divisions. This puts a year-one salary for potentially a 21/22 year old at £70,000 - 4.5 times the average for a graduate. Whilst the £35,000 base salary only rises by four figures annually, bonuses for the best performers rises exponentially, being many multiples the size of their base salary, so that many in Corporate Finance, Trading and Sales can expect six-figure pay packages in their 3rd year, when promoted to Associate level.

Graduates with a Bachelors or Masters degree begin as Analysts on around £35,000 base salary, those with PhDs or MBAs but no experience begin as Senior Analysts on around £45,000 and those with MBAs and prior experience begin as Associates on around £60,000 (and six-figures when including a bonus). At the upper end, most Managing Directors expect a seven-figure salary.

Compensation for bankers who work in the Sales & Trading division varies much more than in actual investment banking. Because compensation is closely attached to the profit generated by each trader, a star Associate with a good relationship with his Managing Director can sometimes earn more than other (presumably less profitable) Managing Directors at the Firm. Those involved in the more complex, structured Derivatives side tend to earn more than those involved in flow products, due to the considerably higher profit margins of using financial "Options".

Adapted from the Wikipedia article "Compensation - UK", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki