The world’s largest banks have kept bonuses for their juniors flat in 2021, despite a hiring frenzy and a battle to roll out fresh perks amid a surge in workload and stress.
Junior bankers in London have not enjoyed the bonus increases handed out to dealmakers in the upper ranks, according to a new survey by specialist recruiters Dartmouth Partners, with banks instead choosing to favour high-performers while keeping the overall compensation pool flat.
Bank of America, Citigroup, JPMorgan and Morgan Stanley were consistently among the higher paying banks for juniors, the numbers — gathered from interviews with analysts, associates and vice presidents in investment banking — show, while Wall Street banks were generally ahead of their European rivals.
“Banks have generally worked hard to keep their star performers happy as overall bonus pools have remained flat to slightly down on previous years,” said Logan Naidu, chief executive of Dartmouth Partners in the report.
The brutal workload of junior investment bankers has again been thrust into the spotlight this year, after 13 Goldman Sachs analysts leaked a presentation outlining 100-hour weeks, mental health problems and the prospect of burning leading them to quit. Banks have handled record deal flow so far in 2021, and juniors are feeling the strain.
Juniors told Financial News that they will opt for the highest bidder amid a surge in recruitment for analysts and associates, but also demanded more consideration from their seniors who often drop work on them at the last minute, late into the evening.
Credit Suisse was the first major bank to react, paying its junior investment bankers a one-time ‘lifestyle’ bonus of $20,000. Bank of America hiked salaries for its analysts by $10,000 and by $25,000 for associates and vice president level employees, while Houlihan Lokey has also increased pay and William Blair paid a one-off ‘spot bonus’ of $20,000 for analysts, associates and vice presidents who joined before 31 January.
Independent investment bank Jefferies is offering around 1,100 analysts and associates a year-long subscription to Peloton bikes, or other fitness perks, while Barclays has reinforced protected weekends and rolled out new working policies for juniors.
“Whilst many of these recent incentives will no doubt go some way in retaining mid-level and junior bankers and temper the appeal of moving to a competitor for brand, compensation or cultural reasons, there continues to be the draw of the tech, healthcare, VC and private equity sectors amongst others which, similar to every other year, has already resulted in a drain on talent away from investment banks and a frenzy of hiring since the start of 2021,” said Naidu.
JPMorgan has yet to unveil any changes for its juniors, but paid the highest average compensation of £91,100 for its first-year analysts, according to Dartmouth Partners.
The range of bonuses for junior bankers this year is large, with associates at big investment banks paid between 60-150% of salary and VP level investment bankers receiving 40-180% of base pay.
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