Banks barely budge bonuses for analysts despite increased workloads
Investment banking analysts are starting to get their bonuses. And they’re not too happy with them.
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A community of analysts on industry forum Wall Street Oasis (WSO) have taken to the web to their share bonus numbers. The numbers are remarkably similar to the numbers posted for last year’s bonus round. That wouldn’t be a huge problem, in a usual year, or a bad year, but it’s a bit of a problem after a good year – and the workloads that good years bring.
Banks have posted their Q2 and H1 results for 2024, and generally speaking, they’ve done fantastically better than last year. Investment banking (defined as M&A and Capital Markets activity) revenue increased massively, with some banks posting revenue increases anywhere up to 76% higher (at Deutsche Bank) in the first half of 2024 versus the first half of 2023.
That higher revenue is more than just an abstract benefit to the bank. It comes with effort from investment banking teams. And the group working the most are almost always the analysts, who can end up working hundreds of hours per-week.
In the circumstances, analyst bonuses, which are paid in the summer, should surely have risen. They mostly haven't.
Our analysis of WSO figures this year and last year suggests that first-year analyst bonuses were down 1% in 2024 on 2023, second-year analyst bonuses were up 12%, and third year analyst bonuses were up just 2% on 2023. One WSO posted called the numbers they had seen “scary”. Another called their own bonus “disheartening”. One person’s bonus was so bad that a fellow poster hoped that they “weren’t putting up crazy working hours” for it.
The working hours problem is an especially pertinent one this year, and especially at Bank of America. An associate at the bank, Leo Lukenas, died earlier this year from a heart complication after allegedly working 120-hour weeks as part of the bank’s FIG Team, and the bank has been scrutinized for what the Wall Street Journal described as a culture of overwork, and covering up of overwork.
Analyst bonuses, uniquely, are paid in August – the anniversaries of when most analysts would join their bank – as opposed to more senior ranks, which are paid at the end of the first quarter of the year.
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