We always knew in the market that there was a small coterie of bulge bracket firms who paid a load more in comp than the rest of the Street.
Here's the latest from our Highly Placed Professional:
In the Battle of the Bulge, I often wondered whether we were talking about banks’ balance sheets and capacity to trade, or whether it was purely a question of the size of their wallets.
Well, now we know, as recent research suggests that the bigger firms pay up to 37% more than the smaller shops and that Managing Directors at the likes of Deutsche Bank and Morgan Stanley are on at least £600,000.
But that’s a bit misleading because there is another bulge - call it bulge cubed - which marks out the U.S. investment banks from the rest. Average senior pay across the board is now at about £200k for MDs, bigger shops pay about £600,000 and the real players (the big U.S. firms) pay at least £1m or more. So now you know. Sort of.
What’s interesting about all this is that the new EU Directive on pay is seeking to limit bonuses to no more than twice basic compensation, which will probably lead to the top shops again paying basic salaries of eye watering proportions, and the smaller houses - struggling with regulation, lack of capital, and low trading volumes - will happily comply with the spirit of the directive, leaving a whole tier of effectively second class financial markets professionals struggling to keep up with the far richer Joneses.
There’s one other lesson to be learned from this sorry tale - which is that to get into the best paying banks, you have to be seriously good, highly political and incredibly motivated. We've all heard the stories of the top firm staffers working weekends and 18 hour days. As in many walks of life, if you take your career very seriously - very early on - you will inevitably reap the rewards later, albeit at immense personal cost.
I’m not pleading poverty, but I only wish I’d taken it all a lot more seriously when I was a young buck!