Equity Research Compensation 2016

Water Cooler Careers
#1

Hi everyone.

I was wondering if someone could illuminate me on current compensation packages at Bulge Brackets for incoming Equity Research associates.

Also, I’m coming from a science grad program and I will likely be confined to coverage of the healthcare/pharma/biotech sector for a few years before branching out. Coming in with a Phd from a decent grad program and a really bad undergrad, and assuming I do make it to a Bulge Bracket like JP Morgan, Credit Suisse, Deutsche, etc. and I have 2 years of industry experience, will they pay me above the going rate for a Associate first year and if so, by how much?

I’ve heard that these are realistic pay ranges. Please tell me if they’re too low.

Associate Years: Y1 $150-170k/ Y2 $180-210k / Y3 $250-280k/

Analyst Years: Y1 $300-400k/ Y2 $400-600k/ Y3 $600-1mil/

Then Y4 and on is pretty much 1-10 million (1 in a bad year, 10 in a good year). How realistic is this? I looked on glassdoor and it said that Credit Suisse pays Research Associates up to 400k. So I’m just listing based on what I think is reasonable.

#2

don’t bother thinking abuot the senior analyst ranges, you’re too far away to worry about that

these associate ranges (they look like all-in pay) are realistic only at the top of the top (JPM, GS, MS, etc), AND assuming you went the MBA route. If you didn’t come from MBA recruiting, then whack the numbers down by probably 20-30k to start

if you drop to a low-tier research shop, those numbers are too high and can be quite low, think 110k all in even

#3

What city OP? Those new york numbers?

#4

NYC. I’m coming from a PharmD background. An acquaintance of mine was able to make it into a BB equity research role after a few years of work and I think they hired him as an experienced associate. He didn’t have an MBA either and I also don’t know how much he makes though. But I assumed that these were top of the line pay packages.

Am I correct in assuming that if I make it, I’ll be making 1-10 million from the age of 30 and on?

If that’s the case, why do people even bother going into Investment Banking if Equity Research offers a much higher compensation for much fewer hours?

#5

Also, if I want to stay in Equity Research for the rest of my life, do I need an MBA to advance? I look through some linkedin pages and they all have people with only a Bachelor Degree.

#6

The days of $10 million reseach analysts are totally unrealistic. there may be less than a handful across all sell side research that make over $5m

$1million by 30 is also extremely rare. I would put that out of your mind as well. if you make half of that by 30, consider that a success

you are dreaming wayy too high

#7

is this guy trolling or what? These comp figures seem way excessive across the board.

#8

Ok ok maybe I am a bit too optimistic about the millions by 35 thing. But surely the rest is all correct, no?

Most analysts in niche fields at top banks make at least 500 by the time they have 4 years of experience (26 years old, 4 years in ER out of college)? Then someone with a higher sciences degree would probably command even more pay.

So I guess most people make what .6-1.5 million from age 26-32 each year? 7 figures are definitely not a stretch in finance…I know that. I just assumed that by 35 people were making around 1-2 million. In investment banking the pay gets to be that high…

I need money man. I hate being in debt. And I wanna keep up with the Joneses.

#9

Do some industry research, in particular, industry growth trends. itera can’t be spoon feeding you.

At least figure out how difficult it is to become an analyst first. there is nothing wrong with needing money, there is however, an issue with being unrealistic in this business.

#10

I tried to find stuff through google. The information is scattered and uninformative. That’s why I came to this forum.

But fair enough. I’ll do some more research into this. I still don’t think I’m that unrealistic. We’ll see. Thanks all for your input!

#11

I can say that even at hedge funds 1-10mm in your early 30s is rare.

#12

Thanks infinity. Even though it is rare at age 30-32, it probably becomes the norm in your late 30s.

#13

You’re nearly doubling salary at associate level in 2 years. Not sure if that’s even a possibility.

#14

My 13 year old created a lego video on youtube. It’s like 45 seconds long and a fake movie trailer about a man and his motorcycle. It got like 150 views. He’ll be pewdiepie by his late teens, right?

#15

This guy has got to be trolling. If for real, then he won’t be hired much less “make it.”

#16

I’m not trolling. I’ve never worked in finance before. But I hear so much about the salaries and compensation packages from other forums and I really do think with the right elbow grease anyone can make millions by the time they’re 35. It’s a lot of work. I get it. But these salaries are an everyday reality for the top ER guys. The top IBD guys are probably at this level too. The algo traders and prop traders probably start out high, but are pretty much kept under 500k comp their entire lives. Truth Truth Truth.

You guys are like the people who say that if you go to a non-target school, you have 0 shot at becoming a top Wall Streeter.

I’ve even compiled a list comparing ER, IB, and Trading showing what I think are likely compensation packages for a 33 year career (start at 22, retire at 55).

#17

Just curious, what finance background do you have that makes you think you will get a job in ER, much less make top end of the spectrum pay?

#18

I think what you hear is the extremely rare success stories. The same story is pitched to accountants. Go work for Big 4 and make partner, they say. Less than 1% make it that top level and the rest plateau way before then (which is not necessarily bad, some may want better quality of life, other reasons). I’ve read that the median financial analyst doesn’t even make as much as the median accountant and the only reason finance looks so much better on the average is because of the outliers.

Average Harvard and Standard MBA’s make less than $150k/yr total comp according to this website:

http://poetsandquants.com/2014/03/13/what-mbas-are-making-at-the-top-50-schools/

$500k with 4 years of experience? Simple supply and demand should tell you that level of comp is unsustainable, especially in an industry without factors which keep new entrants low (MD, medicine).

JBrowntown linked the 2015 CFA Chicago comp survey a few months ago on another thread:

http://www.cfachicago.org/pub/cfachicago2015salarysurvey.pdf

Maybe that would be a better starting point for you. On page 9 it says “Median total compensation for those with more than 20 years of experience is $273,000” Long story short, I think your numbers are optimistic.

#19

Well I have science research experience, and have done 2 years of consulting at a good life sciences firm working alongside top grads and Phds. I’m far from successful, and I know that there are plenty of people better than me. But if my friend can do it, I figured I could as well. I know currently to you guys I look like a wannabe and a greedy little boy eager to pay off some school debt and live the good life. But I’ve worked pretty hard and I’d really like a shot at it.

I need my millions man. I need em!

#20

well then no need to ask to random people on a forum about your goals.

I don’t see Spieth, Woods, Ko going on a golf forum asking people “how much money would I make in endorsements if I won 2 majors in a single year before the age of 22? Would I make more than the top 1% of tour players? Because I know these numbers are almost unrealitic but I can do it with hard work.”

They don’t give a &*^$ about what others think. They believe in themselves and they believe that others are just there to play for second place and be in awww with them.

What I am saying is if you believe you can then go out and do it…no need to ask on forums…Although the fact that you did ask on a forum tells me that you are not the Spieth or Woods like but actually just naive.

Good luck and keep at it because most of us if not all of us are going for that 1-10mm salary.