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Investment Banking average salary

Banking Investment / April 22, 2020

Investment banking salaries, which have been under intense scrutiny after the global financial crisis of 2008-2009, continue to be a beacon for media and political commentary. Although investment banking gets lumped into a single category, it actually comprises many positions broken down by experience and title-and commensurately, salaries. This tiered approach to salary was designed years ago, and continues on today.

Investment Banking Levels and Salaries

Investment bankers’ tiered structure is reflective of both education level (bachelors vs. masters) and years spent in the field.

  • Analyst (the lowest tier): Usually a recent college graduate. Analysts generally work extremely long hours- often 80-120 hour work weeks! One bonus (if you are not an early riser) is that because analysts do a lot of the “grunt work” which needs to be approved by a higher level (like the director or managing director), they often arrive at work later than the higher tiers (9:30-10:00 am is not uncommon). For these long hours, analysts are compensated higher than most of their peers in other professions. According to surveys over the past three years, the average first year analyst’s annual salary including bonus fell in the range of $70-150K, with second and third year analyst salaries ranging from $80-160K and $80-190K respectively. This range has been consistent over the past decade, although initially after the financial crisis, the range has reduced in some cases, slightly. Sign-on bonuses are also frequently offered, which can fall in the range of $5-20K.
  • Associate (the next leg up): Usually recent MBA graduates. Associates, like analysts, work long hours, although they may be slightly less (some estimates say between 10-20% fewer hours). Associates work in step with analysts, but because of their seniority position, regularly direct analysts on assignments. The average range of annual base salary including bonus for first year associates has in recent years been $150-250K and for third year associates, $250-500K. First year associate bonuses are reported to be in the range of 10-50% of base but can grow to be up to 300% of base for third year associates.

After the analyst and associate levels, the salaries for vice-presidents up to managing directors, particularly the variable or bonus components, are much more wide-ranging. The bonuses are often a function of personal contributions in addition to the overall profitability of the entire group or work unit. As a result, there is no real “average” compensation that is representative of a particular level. With that caveat, below is a table listing compensation data as reported over the past several years.


Years of Experience

Average Reported Annual Total Compensation


3-6 years



5-10 years

$400K- 1.5M

Managing Director/ Partner

7-10 years


(Sources: Wall St Oasis, Careers In Finance)

Although it is difficult for many people to fathom the lofty compensation packages reported for the higher ranks, one change that has happened over the past five years has been a transition from an all-cash bonus to one that has an equity component, which can be tied up for close to nine years. The lower ranks (analysts and associates) are typically immune to this structure.