Investment Banker Salary

How much is an investment banker salary?

On an absolute basis, investment bankersInvestment Banking Career PathInvestment banking career guide - plan your IB career path. Learn about investment banking salaries, how to get hired, and what to do after a career in IB. The investment banking division (IBD) helps governments, corporations, and institutions raise capital and complete mergers and acquisitions (M&A). are some of the highest paid professionals for their age.  As a new hire, you can expect to earn over $100,000 straight out of school, which will probably blow most of your classmates out of the water.  But the investment banker salary on an hourly basis is another story.

On a per hour basis, investment bankers are not paid nearly as well.  With most analysts and associate working over 100 hours per week, their hourly wages can range anywhere between $25-$35 per hour. That’s not bad, but it doesn’t sound as good as $100,000 a year did.

Investment banker salary table

Source: industry sources.

What is the investment banker salary structure?

Investment banking professionalsInvestment Banking Career PathInvestment banking career guide - plan your IB career path. Learn about investment banking salaries, how to get hired, and what to do after a career in IB. The investment banking division (IBD) helps governments, corporations, and institutions raise capital and complete mergers and acquisitions (M&A). are paid based on two components of compensation: salary and bonus.

The bonus is a large part of a banker’s total income across all positions, but especially at the more senior levels, where a bonus can be several times the base investment banker salary.

Why are bankers paid so much?

The advocate would say they’re paid so much because the banks work on very important transactions that generate big fees.  In exchange for such important work, they need to be smart, hard-working, and highly skilled – and thus, well-compensated.

The cynic would say they’re paid a lot because the work is super stressful, with a military-like hierarchy, and the hours are unbearable.  In fact, the hours are so long that they don’t actually make that much per hour.

How do you become an investment banker?

Along with CFI’s investment banker salary guide, we’ve got the ultimate guide to getting a job in investment bankingHow to get a job in investment bankingThis guide will outline how to get a job in investment banking using out top three tactics: networking and resume, interview prep, and technical skills. This guide is based on my firsthand experience of what is the most effective way of how to get a job in investment banking..

Most important is to have a solid understanding of financial modeling and valuation, which you can master with our online courses.

Financial modeling skills

One of the most important skills for a highly paid investment banker is financial modelingWhat is Financial ModelingFinancial modeling is performed in Excel to forecast a company's financial performance. Overview of what is financial modeling, how & why to build a model. A 3 statement model links income statement, balance sheet, and cash flow statement. More advanced types of financial models are built for valuation, plannnig, and.  Analysts and Associates spend a lot of time in Excel, building various types of modelsTypes of Financial ModelsThe most common types of financial models include: 3 statement model, DCF model, M&A model, LBO model, budget model. Discover the top 10 types of Excel models in this detailed guide, including images and examples of each. Financial modeling is performed for many reasons including to value a business, raise money to support transactions, pitches, and other activities

Source: CFI’s financial modeling courses.

Building these models requires a strong understanding of accounting and how the three financial statements are connectedHow the 3 Financial Statements are LinkedHow are the 3 financial statements linked together? We explain how to link the 3 financial statements together for financial modeling and valuation in Excel. Connections of net income & retained earnings, PP&E, depreciation and amortization, capital expenditures, working capital, financing activities, and cash balance. Additionally, good Excel skills, knowledge of business strategyStrategyCorporate and business strategy guides. Read all CFI articles and resources on business and corporate strategy, important concepts for financial analysts to incorporate in their financial modeling and analysis. First mover advantage, Porter's 5 Forces, SWOT, competitive advantage, bargaining power of suppliers, and extreme attention to detail are all requirements for building good financial models.

Investment bankers often work on these models until the early hours of the morning, especially when working on a live dealDeals & TransactionsResources and guide to understanding deals and transactions in investment banking, corporate development, and other areas of corporate finance. Download templates, read examples and learn about how deals are structured. Non-disclosure agreements, share purchase agreements, asset purchases, and more M&A resources or transaction.

Additional Resources

Thanks for reading CFI’s investment banker salary guide.  Keep learning and advancing your career by becoming a certified Financial Modeling and Valuation AnalystFMVA® CertificationThe Financial Modeling & Valuation Analyst (FMVA)® accreditation is a global standard for financial analysts that covers finance, accounting, financial modeling, valuation, budgeting, forecasting, presentations, and strategy. , as well as exploring these additional resources below:

• Compensation guidesCompensationCompensation and salary guides for jobs in corporate finance, investment banking, equity research, FP&A, accounting, commercial banking, FMVA graduates,
• Salary guide for CFA® charterholdersCFA® Salary GuideThe median CFA® salary is approximately $180,000 in the United States while average total compensation over $300,000. Learn more about salaries, compensation, and what your expectations should be as a financial analyst in equity research, FP&A, portfolio management, and other areas
• What investment bankers doWhat do Investment Bankers do?What do Investment Bankers do? Investment bankers can work 100 hours a week performing research, financial modeling & building presentations. Although it features some of the most coveted and financially rewarding positions in the banking industry, investment banking is also one of the most challenging and difficult career paths, Guide to IB
• Career MapMapInteractive Career Map - discover your career path in corporate finance. Learn which job is right for you: salary, personality, skills, certifications etc.