More than 80 percent said they don’t believe that their compensation is mainly predicated on performance. Instead, [Capstone managing partner Rik] Kopelan said, young investment bankers worry that it’s “based on the profitability of the firm, based on how powerful the group heads were, based on capricious things.” [emphases mine]
Gosh, really? That would never happen in the real world.
So why are they so saddened?
One investment banker who participated in the survey described a breach of the “tacit understanding” that he or she would be well compensated.
I don’t know about anyone else, but if you try to use the phrase “tacit understanding” to get something valuable from an Investment Banking client, you will quickly find that you no longer have a client.
But the pain…
Considering “the sacrifice I make in my personal life (100-hour work weeks, canceled vacations, etc.), this business has to be more rewarding,” the person said, according to Capstone.
You hear a lot about people working 100-hour weeks. Some of it is true. The part that is left out is that those weeks are also filled with a company car home (and often to), meals provided on the expense account, and a guaranteed base salary with a bonus that (for those 100-hour a week jobs) generally runs north of 100% of salary. And that’s ignoring signing bonuses.
Note, by the way, that having a guaranteed salary does not make you an entrepreneur. Or a farmer. Or a store owner. Or a restauranteur of any type, from Tom’s Diner to The Quilted Giraffe. All of whom are also likely to be working 14+ x 7 without pulling what some glibly compare to McDonald’s wages.
What it does do is gives you an opportunity to move up in an organization, to develop your career, to peak out at compensation of, say, almost 3/4 of $1,000,000,000 in a year.
Not exactly on par with what a bodega owner or a farmer has a chance to make.
And, yes, comp may have dropped a bit since 2007. (I wonder why?) But starting comp is still rather high (PDF; keep in mind that the numbers shown are in Pounds, not Dollars; multiple by about 1.6).
The good news:
“Fewer and fewer plan on making it a career, because they’re working these long hours and not getting paid as well as they were.”
Gosh, what will we do with fewer people in Securities and Investment jobs?
Come to think of it, how popular is “intermediation” as a career choice since the End of the Reagan Era?
Last year, according to New York State Comptroller Thomas DiNapoli, Wall Street paid out $20.8 billion in cash bonuses, instead of the $22.5 billion a year earlier.
A mere $25-27,000 per person, sort of. But that’s cash alone—stock and stock options, for instance, are not included.
Don’t worry, though. I’m certain everyone who says “Do you want fries with that?” is also in line for $25,000 or so in bonus every year. That’s why everyone knows the phrase, eh?