How are bonuses in IB actually calculated? Are first-year analysts really getting 100%?

Bonuses are based on the performance of the firm, the group and of course yourself and typically range from 30 to 100% of your base salary. In strong years you might get 100% bonus even as a first-year analyst  but it is by no means guaranteed. E.g. in 2023 (when deal volume was way down) you might only have gotten 50% because of the overall performance of the company even though your performance was on point.

Hey There!

Bonuses in investment banking are typically calculated based on a combination of individual performance, team or deal success, and overall firm profitability. While the base salary is relatively fixed, the bonus can vary significantly depending on how well you contribute to deals, meet targets, and align with the firm’s goals. The exact formula is often proprietary and can differ between banks, but it generally reflects both your effort and the financial results of the group you work in.

Regarding first-year analysts getting 100%, this usually means a bonus that matches their base salary, which has become more common in recent years at many top banks. However, hitting that 100% figure isn’t guaranteed for everyone; it depends on performance and the bank’s overall year. Some analysts may receive more, while others receive less, based on their contributions and the firm’s profitability. Understanding that bonuses reward both personal and collective success helps frame expectations realistically during your early career stages.