| Topic Name: |
Associate Pay Increases |
| Message Name: |
You're argument is s |
| Date Posted: |
05/11/2000 |
| In Reply To: |
The standard first-year associate pay package for BB firms is $25K signing, $80K base, and $30K stub-year.
I agree that this is too low. The signing bonus is basically gone by the time you pay taxes, secure an apartment, and pay summer living expenses. The $80K base is way too low to support a reasonable cost of living, especially when your coming out of school with an almost six-figure educational debt. After taxes, you're taking home less than $4K/month. Count on spending $2K of that per month on rent. Educational loans run about another $1K per month. That leaves less than $1K per month for living expenses. NOT reasonable.
Basically, you have to sock away all of the $30K stub-year bonus (more like $17K after taxes) to supplement your base salary so you can get by until the first full-year bonus.
Now, I will be the first to acknowledge that, AFTER the first year, the pay in banking is phenomenal. Once that first FULL-year bonus comes in, then there are no real worries. However, the first-year compensation package is inadequate.
DLJ's associate pay raise was ridiculous (albeit great for them), and I doubt that anybody is going to match. It would be nice though if the banks would raise their first-year base or stub-year bonus by $20K or so.
Now, I know that this post is going to engender some criticism from the analysts who are making even less. However, keep in mind that many associates are people who have ALREADY been analysts for three years, and have then gotten their MBAs (incurring substantial debt along the way). They SHOULD be making significantly more.
The fact is that the economy has been very good in recent years. Law firms and consulting firms have significantly raised their salaries, and more senior bankers have seen their pay go through the roof. All I'm saying is that it would be nice if the banks could throw just a little bit of this down to the first-years. |
| Message: |
You're argument is somewhat weak - pay is based upon supply and demand for skilled human capital. Demanding more pay b/c you racked up an LOC with Sallie Mae and b/c your friends who went to law or consulting ware making more than you would not win me over if I were you're MD. Most of your comp should be driven by your production anyway, not your base or guaranteed bonus. Besides, there is a fresh crop of newly-minted MBAs coming out right now that could be had for less than you're demanding. Start producing a little more and spending a little less time on the Vault during the work week.
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