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Investment Banker Salary

The average salaries of investment bankers

How much is an investment banker salary?

On an absolute basis, investment bankers 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 Money

 

Investment banker salary table

TitleBase SalaryBonusTotal Remuneration
Analyst$85k - $100k$50k - $100k$125k - $200k
Associate$100k - $120k$80k - $130k$180k - $250k
Vice President$120k - $150k$100k - $250k$220k - $400k
Managing Director$300k - $1M$200k - $10M+$500k - $10M+

Source: industry sources.

 

What is the investment banker salary structure?

Investment banking professionals 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 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 modeling.  Analysts and Associates spend a lot of time in Excel, building various types of models to support transactions, pitches, and other activities

 

investment banker model

 

Source: CFI’s financial modeling courses.

Building these models requires a strong understanding of accounting and how the three financial statements are connected. Additionally, good Excel skills, knowledge of business strategy, 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 deal 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 Analyst, as well as exploring these additional resources below:

  • Compensation guides
  • Salary guide for CFA® charterholders
  • What investment bankers do
  • Career Map

FMVA certification program

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