Investment Banking Salaries – That Much Can You Really Earn

Investment Banking is famous for its high salaries and generous bonuses. Yet, understanding how compensation actually works in this industry is key to setting the right career expectations.

In this article, we’ll dive deep into Investment Banking salaries, explore what influences them, how they differ across regions and firms, and share expert insights on bonus trends and salary negotiation.

How Is the Salary Structured in Investment Banking?

The investment banking industry has a meritocratic culture, where compensation closely reflects team and individual performance. As a result, bonuses can make up a large portion of total pay, especially during strong deal years.

Below is a breakdown of the investment banking pay structure that shows how different components add up to total compensation:

• Base salary: The fixed income you receive when joining the firm. Each bank sets salary ranges for different positions, with entry-level analysts earning less than senior associates.
• End-of-year bonus: A performance-based reward given annually to recognize contribution and retain top talent. It often ranges between 50% and 100%+ of base salary.
• Stub bonus: Partial bonus paid to new hires who join mid-year, usually 20–30% of base pay.
• Performance bonus: Awarded throughout the year to reward deal success and strong results against specific performance metrics.
• Stock-based bonus: Compensation in company shares or restricted stock units (RSUs), aligning long-term employee and firm performance.
• Signing bonus: A one-time payment offered to candidates when accepting an investment banking role.
• Other benefits: Additional perks such as retirement plans, health insurance, and vacation days complement the overall package.
   

Which Factors Influence Your Salary in Investment Banking?

What you take home as an investment banker can vary significantly due to several factors. Let's look at the primary determinants of an investment banking salary.

• Location: Geographic location is one of the main drivers of pay in investment banking. Major financial hubs such as New York, London, Hong Kong, and Singapore offer the highest salaries, as banks compete for top talent. The higher cost of living in these cities also plays a role.
• Firm size and reputation: Top global banks in the bulge bracket and elite boutique categories usually offer the best pay thanks to strong deal flow and high-profile clients. Smaller or mid-sized firms tend to pay less due to lower deal volume and value.
• Experience and position: Compensation rises quickly with experience and seniority. Entry-level analysts earn the least, while associates and vice presidents can make several times more. Promotions are performance-based, rewarding strong results and deal experience.
• Educational background: A strong academic record boosts earning potential. Degrees like an MBA or certifications such as the CFA make candidates more competitive and can lead to higher salaries or faster promotions.
• Work history: Your track record shows your deal exposure and execution ability. Candidates with internships or experience at reputable financial institutions usually receive higher offers.
• Specialization: Pay varies by focus area. Professionals in Mergers & Acquisitions (M&A) often earn more than those in Equity Capital Markets (ECM) or Debt Capital Markets (DCM), especially in active M&A periods.
• Performance: High performers receive the largest bonuses, particularly in profitable years. Both individual and firm performance influence variable pay.
• Market conditions: The industry is sensitive to market trends. When deal activity and revenues are strong, salaries and bonuses increase, while downturns lead to more conservative packages.
• Negotiation skills: Strong negotiation skills help you communicate your value and back your expectations with data. This ensures compensation that reflects your qualifications and performance.
   

How Do Investment Banking Salaries Differ by Country?

Investment banking salaries vary significantly by country. The factors that influence the differences include local economic conditions, cost of living, talent supply and demand, financial market maturity, and the presence of major financial markets. The U.S. is known for the highest salaries in investment banking, particularly in major financial centers like New York City.

If you want to know more about salaries in investment banking, check out the following articles:

👉 Investment Banking Salaries in the US
👉 Investment Banking Salaries in the UK
👉 Investment Banking Salaries in Germany
👉 Investment Banking Salaries in Singapore
👉 Investment Banking Salaries in India
👉 Investment Banking Salaries in Australia
👉 Investment Banking Salaries in the UAE
👉 Investment Banking Salaries in Canada
👉 Investment Banking Salaries in France
 

What Are the Top Paying Investment Banking Firms in Investment Banking?

The common perception in the IB industry is that the biggest names like Goldman Sachs, JPMorgan, and Morgan Stanley offer the highest investment banker salaries. While they are among the highest paying investment banks, they are not the absolute top payers.

Several elite boutique investment banks sometimes offer higher total compensation for first-year investment banking analysts than the big names.

Below is a list of the top paying investment banks:

• Centerview Partners
• Evercore
• Lazard
• Rothschild & Co
• Jefferies
• Goldman Sachs
• JPMorgan Chase
• Morgan Stanley
• Bank of America Securities
• Citigroup
• Moelis
• PJT Partners
• Perella Weinberg Partners
• Barclays

You want to learn more about the top investment banks in your region? Check out the following articles:

👉 Top Investment Banks in the World
👉 Top Investment Banks in the USA
👉 Top Investment Banks in the UK
👉 Top Investment Banks in Dubai
👉 Top Investment Banks in India
👉 Top Investment Banks in Canada
👉 Top Investment Banks in Australia
👉 Top Investment Banks in Singapore
👉 Top Investment Banks in UAE
👉 Top Investment Banks in France
 

How Do Investment Banking Salaries Progress with Experience?

Investment banking follows a structured career path that reflects growing expertise, responsibility, and deal-making experience. As professionals advance through each level, both base salary and bonuses increase significantly, often doubling or tripling from analyst to associate to VP and beyond.

Below is a typical investment banking career ladder, showing how roles evolve from entry-level positions to senior leadership:

Career progression in investment banking is highly competitive. Many analysts and associates transition to buy-side roles such as private equity or hedge funds before reaching senior levels. Those who stay often see the highest rewards in both compensation and client responsibility.
 

How Do Investment Banking Salaries Compare to Other Top Paying Industries?

Investment banks rely on the expertise, relationships, and deal-making abilities of their IB bankers to generate revenue from advisory fees, trading profits, and capital markets transactions. So, they allocate a larger portion of their revenue towards compensating their highly skilled workforce. This is crucial to attracting and retaining top performers who can drive the firm's success.

While top consultants and software engineers at major tech firms can earn investment banking-level salaries, the average income in these industries is often lower. An investment banking analyst in their first or second year at top banks typically earns higher salaries than entry level software developers, consultants, healthcare workers, sales and marketing professionals, and other finance careers like CFAs and corporate finance.

Investment bankers in more senior roles might even have incomparable figures due to hefty bonuses in great financial years. The high pay reflects the intense workload, high-pressure environment, and performance-based culture in investment banking.

This does not sound like the right career choice for you? A career in consulting may be a lucrative alternative: 👉 Consulting Salaries – How Much Can You Really Earn?
 

How and When Do You Ask About Salary During the Application Process?

Salary discussions would be much simpler if companies disclosed their exact pay and available wiggle-room for investment banking roles in the job postings. You would determine upfront whether a position meets your salary expectations. Unfortunately, this is rarely the case. Often, you must navigate a competitive application and interview process before learning about the compensation.

So, when and how should you inquire about compensation? Here are some guidelines to help you approach this topic confidently and professionally.

When to Ask About Salary 

1. Wait for the right moment: Even if you're dying to know the offer amount, it's best to wait until the employer expresses significant interest in you. This typically happens after the first or second interview depending on the company's recruitment process. Waiting shows you are a serious candidate and allows you to gauge their interest before discussing compensation.

2. During the offer stage: Salary discussions are most appropriate when you receive a job offer. At this point, you can ask for clarification on the salary and total compensation package, which may include bonuses and benefits.

3. If prompted by the employer: If the interviewer brings up salary expectations at any stage of the recruitment process, be prepared to discuss them. Mostly it occurs in later interviews once they have assessed your fit for the role.

4. Room for questions: The potential employer might ask if you have any questions for them at any stage. You can use that opportunity to ask about compensation.

How to Ask About Salary

When the time comes to discuss your investment banking salary, how you go about it is important as well. Here are a few tips to guide you.

1. Express enthusiasm first: Start by expressing your excitement and passion for the company and position. For example, “I’m excited to have this opportunity and would love to discuss the compensation package once we finalize the details of the role.”

2. Ask for a range: Instead of asking for a specific figure, inquire about the salary range for the position. You might say, “Could you please provide the salary range for this role?”

3. Be professional and flexible: Frame your question in a way that shows you are open to negotiation. For instance, “Based on my research and experience, I believe a salary range of $X to $Y would be appropriate for this role, but I’m open to discussing this further.” Always use numbers close to the higher end as it's easier to negotiate downwards than upward.

4. Inquire about total compensation: Don’t just focus on base salary. Instead, ask about bonuses, signing bonuses, and other benefits. This provides a clearer picture of your total potential earnings.

5. Use market data: Before the interview, research the market rate of your role based on location, experience, and firm's prestige. You might even find the average rates for the specific company and role you're hoping to get. Using the industry benchmarks to support your salary expectations can also leave a good impression.

6. Maintain professionalism: Regardless of the outcome, keep the conversation professional and courteous. If the offered salary is below your expectations, express your willingness to discuss it further rather than rejecting it outright.

Can You Negotiate Your Salary in Investment Banking?

Yes, you can negotiate your IB salary instead of just taking the offer given. But whether your efforts will bear fruits depends on several factors.

If it's your first job out of college without much industry experience, you might not have much negotiating power. Bulge bracket and elite boutiques often offer standardized base salaries for junior roles. This leaves little to no room for negotiations except maybe for the signing bonus and relocation package. But if the pay is below the industry trends or you have other offers, you can have a basis for negotiations.

If you're applying for senior associate or higher-level roles in investment banking, you definitely possess the qualifications and leverage to negotiate your salary. And you shouldn't fail to do so. Investment banks actively seek experts who can drive deals and generate revenue. So, if you can demonstrate a strong track record that shows the firm would miss out by not hiring you for the role, they might even allow you to set your compensation package.
 

What Trends Are Emerging for Salaries in Investment Banking?

Investment banking salaries remain among the highest in the finance industry, even as market cycles fluctuate. Entry-level analysts today earn a total compensation between $100,000 and $200,000, combining base pay and performance bonuses. The exact amount depends on the bank’s size, location, and deal activity.

When it comes to base salaries, analysts typically start between $80,000 and $100,000, while experienced professionals in senior positions such as Vice Presidents (VPs) or Managing Directors (MDs) can exceed $600,000 per year. These numbers illustrate the steep upward trajectory of compensation as experience and responsibility increase.
 

After record-high bonuses in 2020–2021, payouts declined as deal activity slowed. Now, early signs of recovery suggest a potential rebound in bonuses, especially as competition for top talent intensifies again.
 

How Can PrepLounge Support You in Starting Your Investment Banking Career?

We know how tough it can feel to prepare for your first step into investment banking. Between mastering the technicals, understanding the industry, and getting ready for demanding interviews, it’s easy to feel a bit lost at the beginning and that’s exactly where we come in.

At PrepLounge, we make your preparation smoother, more focused, and a lot less overwhelming. You don’t have to figure it all out on your own. We’ve built tools that help – whether you’re just starting with the Basics or already sharpening your interview skills. Check them out!

Key Takeaways

Investment banking remains one of the most lucrative careers in finance, driven by the industry’s reliance on human capital as its main source of value creation. Compared to other top-paying fields such as consulting, tech, and healthcare, bankers earn higher total compensation due to the deal-focused and performance-based nature of their work.

While it’s possible to negotiate your salary, outcomes depend on experience, qualifications, and position. Senior professionals usually have more leverage, while entry-level roles follow standardized pay structures. The best time to discuss pay is once the employer has shown strong interest, ideally supported by industry benchmarks to guide your expectations.

Salaries and bonuses rise sharply with seniority, from Analyst to Managing Director. Key factors influencing total investment banking compensation include location, firm reputation, performance, market conditions, and negotiation skills. Most packages combine a fixed base salary with variable bonuses, which often make up a large share of total pay.