If you work for the investment banking division of a major bank and are wondering how you can conceivably chuck in your job and work fewer hours without taking a huge hit to your newly elevated salary, then we have some bad news. You probably can't. You certainly can't join consulting firm McKinsey & Co and expect to earn anything near as much in fixed pay.
Following this summer's salary rises, vice presidents (VPs) at the most generous banks on Wall Street (think William Blair) are now earning salaries of up to $275k, and $250k is relatively normal. At Goldman Sachs in New York City, salary information from the allocation of H1B visas in 2021 reveals that eight VPs have been hired on salaries of $280k this year, that three have been hired on $300k and that one has been hired on $400k. The higher salaries are all for VPs starting after July.
Consulting salaries have not kept up. Similar data for H1B hires at McKinsey & Co. reveals that the strategy consulting firm was hiring associate partner-level management consultants across the U.S. on salaries of $200k throughout August. Meanwhile, two McKinsey & Co. full partners were hired on salaries of $240k and $250k, six were hired on $275k and just one was hired on $347k.
Before you become a partner at McKinsey, you'll typically have to be a business analyst, associate, engagement manager, associate partner and then partner. Moving between each step can take up to three years, so if you make associate partner within six years and partner within eight years, you'll be doing well.
By comparison, you can now become a junior VP in an investment bank within five years, and a senior VP within eight.
In salary terms alone, banking VPs are therefore substantially better off.
How about when bonuses are added in? Partners at McKinsey receive a share of the profits, but you'll need to be a senior partner to earn the kinds of seven figure bonuses that make a McKinsey & Co. career really lucrative. Instead, average pay for a McKinsey & Co. partner is $402k according to Management Consulted.
If you're a VP in a bank, your total compensation will typically be double your salary when bonuses are added. In years like this, it could be even more. "I have heard second year VP comp in the $650K total comp range," says one banking headhunter.
This is why you'll be in banking forever. Unless you take a big pay cut.
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