Over the last few months we have been documenting how Wall Street investment banks, one by one, have been raising salaries and generally kissing the asses of their junior bankers in an attempt to both retain talent and prevent PR nightmares about new employees being overworked and underpaid.
The latest to join the fray has been Evercore, who is now following the lead of companies like Goldman Sachs, Bank of America and Jefferies in boosting its first year investment banking analyst salaries to $120,000. It puts Evercore at the top of the heap, with most other firms moving junior analyst base pay to $110,000.
Second year analysts at Evercore will make $130,000 and third year analysts will make $140,000.
Guggenheim has also raised its first year analyst pay to $110,000, marking a second time it has changed since May, according to Bloomberg.
First-year analysts across the global corporate and investment banking, markets, and research at Bank of America will now receive $100,000 per year, up from $95,000. Second year analysts will make $105,000 per year and third year analysts will make $110,000.
B of A said to its employees on Friday last week: “In the face of increased market activity, your contributions and commitment have become more important than ever to the continuous success of our business. Fostering an environment where you can build a long-tenured career is of the utmost importance to us.”
Recall, just days ago we noted that Jefferies announced it was going to be raising pay for its first year analysts in the U.S. to $110,000. The bump in pay is a raise of $25,000 from their previous starting salary of $85,000 per year. Second year analysts will make $125,000, up from $95,000 and third year analysts, called associates, will move up to $150,000 per year from $125,000.
Bonuses for the firm, which are typically handed out in August are “expected to be high”, we wrote. Jefferies’ pay bumps match that of Goldman Sachs, who raised pay by 30% just weeks ago.
First year analysts at Goldman will now also make $110,000 per year in their first year and $125,000 their second year, FT reported weeks ago. Senior associate ranks will see their pay bumped to $150,000, similar to Jefferies.
The move put both Jefferies and Goldman Sachs at the top of the heap in terms of starting pay package terms – before Evercore came along and topped them both.
As we reported weeks ago, there had been significant discussion at Goldman about whether or not boosting junior banker salaries could be counterintuitive. But the rising tide of all banks lifting their pay finally caused Goldman to give in. Jefferies followed shortly thereafter.
There had been pushback from Senior Executives at Goldman, who argued that bumping up salaries mid-year could set a “dangerous precedent” and break from the company’s long-held “pay for performance” compensation structure.
Goldman and Jefferies follow steps taken by banks like Citigroup, which offered an increase of up to $25,000 last month to move its fixed salaries to $100,000 per year. JP Morgan and Barclay’s also lifted salaries to $100,000, from $85,000 at the end of June, FT noted. Bank of America and Wells Fargo increased salaries by $10,000 each, as well.
Finally, as of this week, Credit Suisse is also reported to be bumping their first year analyst pay to $100,000, according to Bloomberg.
Recall, just weeks ago, we noted that Cantor Fitzgerald’s CEO, Howard Lutnick, was pushing back on junior bankers that think they have life too tough. Lutnick said that junior bankers complaining about long hours and stressful demands should “rethink their career choice”.
Lutnick’s comments followed 13 junior bankers at Goldman complaining about their workload earlier this year in a slide deck that was released to the public. They claimed to be working 100 hour weeks and experiencing declining physical and mental health. The public scrutiny caused other banks to offer bonuses and rewards to retain their younger talent..
But when interviewed last week, Lutnick broke from the crowd, stating: “Young bankers who decide they’re working too hard — choose another living is my view. These are hard jobs.”