How do Tech guys expect to get for bonus in IB?

[Ryan]

Hi, I am actually wondering that because there is usually an expected range for IBD Analysts, for example, 30-70K for first year analyst. Is there a similar range for first year tech analyst, let's say who work at front office (S&T)? I know the responsibilities are largely different depend on the exact roles. But aren't bonus similar as junior employee in IB?

Besides that, does it differ a lot from bank to bank among GS, MS, Citi, CS and UBS etc?

I know it cannot compared with trader/quant but just want to get some senses about it. Thanks.

 

[alain]

It all depends how the IT people fit into the big picture. If they belong to a centralized IT you are royally screwed since you are going to get paid from a pool.

If you work for technology under a business group, that's very different because then you are paid the same way as a business analyst. Also, those numbers that you mention are not too real either. They mostly apply to the MBA graduates that get into analyst or associate programs.

 

[elliot]

Generally they are paid 5-10K maximum

 

[GoIllini]

Generally they are paid 5-10K maximum

I normally don't comment on compensation, but I just have to say that this is incorrect.

I'd like to share a few thoughts on this without going into details on any numbers at investment banks:

-If you are hired into a product-specific technology group, many of these groups used to be part of the business side and bonuses will tend to reflect that. There is an incredibly strong market for financial developers right now, and this is being further exacerbated by a shortage of new H1B visas. This is scaring many CIOs, because they know that if they aren't able to pay their technology staff well, the firm will be going back to paper trade tickets and weekly trade reconciliation. I think you said you were hired into a fixed income group, where CIOs are especially scared. A number of hedge funds and financial technology firms are picking off developers in fixed income left and right.

-For a quick comparision, many of the people working in these groups could have easily landed six-figure jobs at Google, Microsoft, or Markit working 40-50 hours/week. If they had chosen to work for a hedge fund (albeit with crazier hours and less job security.), they could have made double that during their first year. A developer at an investment bank would typically only take a job as a financial programmer if he thought he could earn about the same amount per hour, and most firms are aware of this.

-If you're still comparing offers, bonus is something you shouldn't be afraid to ask your hiring manager about it. Something like, "will my bonus look like that of someone at Microsoft or that of a trading analyst's?" should give you a good picture.

 

[AnoopRN]

It all depends how the IT people fit into the big picture.
.

I agree.

Though loosely used , a majority of IT departments are dubbed as cost centres - no tangible/direct contribution to profit. That said, as GoIllini points out, some teams, by virtue of their roles are more closely aligned with the business, and hence in a better position to benefit from the payouts.

 

[iddqd]

Also, those numbers that you mention are not too real either. They mostly apply to the MBA graduates that get into analyst or associate programs.

30-70k looks right to me, if we're talking about a 1st year analyst (out of undergrad) working in something like M&A, which is usually what someone is referring to when they say IBD.

I agree with what everyone else said, it's largely how your department is viewed. Generally, tech is not going to do as well as S&T or IBD bonus numbers.

 

[elliot]

There is an incredibly strong market for financial developers right now, and this is being further exacerbated by a shortage of new H1B visas. This is scaring many CIOs, because they know that if they aren't able to pay their technology staff well, the firm will be going back to paper trade tickets and weekly trade reconciliation. I think you said you were hired into a fixed income group, where CIOs are especially scared. A number of hedge funds and financial technology firms are picking off developers in fixed income left and right.

There is also a strong supply of financial developers. CIOs are not scared about visas. They just move the job to India or Singapore. In fact most of the investment banks have half of their IT staff in India or Singapore working for US/Europe operations.

 

[GoIllini]

Certainly not for qualified financial developers. We've interviewed twenty people in the past week and almost all of them either lack a basic understanding of Java and C++ or fixed income products. You need to have both to work on our system, and many of our guys are getting picked off to work at Markit and hedge funds.

Our management's experience has been that the total cost to get a qualified developer just about anywhere is always going to be six figures. This includes India and Singapore, and many product-specific jobs have to be done in the US. If the research staff needs to be able to casually stop by your desk at 5PM to ask a question about how duration is calculated because a client has a question, it's hard to do that if the developer is in Singapore, so you lose about 20-30% of the value off the bat on an overseas hire, and we haven't even gotten into the extra management costs. Basically, a bank needs to have a number of programmers working in NYC, and they need to have a strong technical knowledge and strong product knowledge and be willing to work 60-70 hours/week.

Right now, if you know Java or C++, have a year or two of experience and know something about a certain product, it's very easy to land a six figure job as a developer on the street.

 

[elliot]

Your post also answered the question why you are not able to attract qualified developers for your team. With 100K in NYC you will just survive. Even a doorman in NYC makes 100k. And the hike you will get annually is very less. You will never be able to buy a good house or car. But if the same guy goes to India/Singapore and makes about 50K he will be able to buy house/car and other luxuries like vacation and private schooling of kids. This is the main reason why people are able to hire good developers in India/Singapore and you have difficulty hiring people in NYC. They are just not interested in applying for H1B visa and coming to US.

 

[IlyaKEightSix]

Certainly not for qualified financial developers. We've interviewed twenty people in the past week and almost all of them either lack a basic understanding of Java and C++ or fixed income products. You need to have both to work on our system, and many of our guys are getting picked off to work at Markit and hedge funds.

Our management's experience has been that the total cost to get a qualified developer just about anywhere is always going to be six figures. This includes India and Singapore, and many product-specific jobs have to be done in the US. If the research staff needs to be able to casually stop by your desk at 5PM to ask a question about how duration is calculated because a client has a question, it's hard to do that if the developer is in Singapore, so you lose about 20-30% of the value off the bat on an overseas hire, and we haven't even gotten into the extra management costs. Basically, a bank needs to have a number of programmers working in NYC, and they need to have a strong technical knowledge and strong product knowledge and be willing to work 60-70 hours/week.

Right now, if you know Java or C++, have a year or two of experience and know something about a certain product, it's very easy to land a six figure job as a developer on the street.

Out of interest, what do you qualify as basic? I went through the first thirteen chapters of Absolute Java about six months ago, and the first seven of Absolute C++ slightly before then. Or is that not even basic ?:X

 

[Ryan]

Your post also answered the question why you are not able to attract qualified developers for your team. With 100K in NYC you will just survive. Even a doorman in NYC makes 100k. And the hike you will get annually is very less. You will never be able to buy a good house or car. But if the same guy goes to India/Singapore and makes about 50K he will be able to buy house/car and other luxuries like vacation and private schooling of kids. This is the main reason why people are able to hire good developers in India/Singapore and you have difficulty hiring people in NYC. They are just not interested in applying for H1B visa and coming to US.

Sadly, 6 figures salary is not even possible for a junior tech analyst in IB. So I supposed that I would be the lowest income people in NYC T_T

---------- Post added at 03:27 AM ---------- Previous post was at 03:18 AM ----------

Thanks, GoIllini. Your thoughts are valuable to me. And I know hedge fund pays much higher than IB in terms of salary (usually 10k+ plus bonus). Is it a possible career path for Tech analyst in IB that jump to hedge fund after couples of years? I thought the trading strategies between hedge fund and IB are totally different.

I normally don't comment on compensation, but I just have to say that this is incorrect.

I'd like to share a few thoughts on this without going into details on any numbers at investment banks:

-If you are hired into a product-specific technology group, many of these groups used to be part of the business side and bonuses will tend to reflect that. There is an incredibly strong market for financial developers right now, and this is being further exacerbated by a shortage of new H1B visas. This is scaring many CIOs, because they know that if they aren't able to pay their technology staff well, the firm will be going back to paper trade tickets and weekly trade reconciliation. I think you said you were hired into a fixed income group, where CIOs are especially scared. A number of hedge funds and financial technology firms are picking off developers in fixed income left and right.

-For a quick comparision, many of the people working in these groups could have easily landed six-figure jobs at Google, Microsoft, or Markit working 40-50 hours/week. If they had chosen to work for a hedge fund (albeit with crazier hours and less job security.), they could have made double that during their first year. A developer at an investment bank would typically only take a job as a financial programmer if he thought he could earn about the same amount per hour, and most firms are aware of this.

-If you're still comparing offers, bonus is something you shouldn't be afraid to ask your hiring manager about it. Something like, "will my bonus look like that of someone at Microsoft or that of a trading analyst's?" should give you a good picture.

 

[iddqd]

Your post also answered the question why you are not able to attract qualified developers for your team. With 100K in NYC you will just survive. Even a doorman in NYC makes 100k. And the hike you will get annually is very less. You will never be able to buy a good house or car. But if the same guy goes to India/Singapore and makes about 50K he will be able to buy house/car and other luxuries like vacation and private schooling of kids. This is the main reason why people are able to hire good developers in India/Singapore and you have difficulty hiring people in NYC. They are just not interested in applying for H1B visa and coming to US.

100K is more than enough to "just survive" in NYC if you don't have a family. It's actually plenty if you live in an outer borough or Jersey/upstate, which most people end up doing anyway unless you are very wealthy.

 

[AnoopRN]

Even a doorman in NYC makes 100k.


But if the same guy goes to India/Singapore and makes about 50K he will be able to buy house/car and other luxuries like vacation and private schooling of kids.

.

Wonder what's behind those doors.

Perhaps with a little effort in India, definitely not in Singapore.

 

[elliot]

100K is more than enough to "just survive" in NYC if you don't have a family. It's actually plenty if you live in an outer borough or Jersey/upstate, which most people end up doing anyway unless you are very wealthy.

It is plenty but still not wealthy. In India you can become wealthy doing IT.

 

[GoIllini]

Out of interest, what do you qualify as basic? I went through the first thirteen chapters of Absolute Java about six months ago, and the first seven of Absolute C++ slightly before then. Or is that not even basic ?:X

I believe that Basic Java also comes along with an understanding of data structures and certain aspects of architecture that every competent programmer should know. If you can't answer basic questions about data structures (IE: explain why some developers think java.util.ArrayList is a bad idea) or talk about the producer-consumer problem and maybe sketch out a quick implementation, we need to be more careful about letting you work on a mission-critical production service.

We'll want to make sure you know how to iterate through an array, list, or hashmap in your sleep (something we have to do about every thirty lines, it feels like). Basically stuff that everyone with a CS (either BS or AS) or Comp. E degree should be able to do without breaking a sweat.

Your post also answered the question why you are not able to attract qualified developers for your team. With 100K in NYC you will just survive.

Just for clarification, this is a number that you came up with. I haven't thrown out any numbers.

 

[Andy Nguyen]

Wonder what's behind those doors.

Wealthy people behind those doors
You know how much each apt in Central Park West costs.
Doormen in NYC can get from tip during holiday season more than most people make a whole year.

 

[AnoopRN]

Out of curiosity, how much do these appartments cost ? To buy? To rent?

A quick google search shows that there are more Asian cities amongst the top 10 in an index of the costliest cities of the world.

 

[GoIllini]

Sadly, 6 figures salary is not even possible for a junior tech analyst in IB. So I supposed that I would be the lowest income people in NYC T_T

Total compensation or salary? There's often a significant gap.

Thanks, GoIllini. Your thoughts are valuable to me. And I know hedge fund pays much higher than IB in terms of salary (usually 100k+ plus bonus). Is it a possible career path for Tech analyst in IB that jump to hedge fund after couples of years? I thought the trading strategies between hedge fund and IB are totally different.

Absolutely. After about two years, you will start getting random calls from headhunters finding ways to poke fun at your current situation and offering you work at a hedge fund. A lot of the time, though, these will be pure tech jobs. These calls are either interesting, annoying, or demoralizing depending on your feelings about your work that day. :D

From the perspective of this financial programmer, the main difference between the hedge funds and the investment banks is that the investment banks have market-making strategies while the hedge funds don't. Market making is a lot more boring (but also easier to break even in) than the proprietary trading that the hedge funds and other parts of the bank do. Also, some of the most complicated financial products only get built at investment banks.

I would say that in general, hedge funds tend to specialize in making bets while investment banks tend to cover the spectrum of financial services. Most banks have some proprietary trading as well, but there's a lot more jobs for that at the hedge funds.

Out of curiosity, how much do these appartments cost ? To buy? To rent?

Most people find a roommate and split a two bedroom.

Typical UWS 2 bedroom with 750 square feet might go for $2700.

If you live in Jersey City or Hoboken, you can dodge the 4% city tax and get the rent on a two-bedroom down to $1600-$1800 pretty easily. Then again, it adds 1/2 hour to the commute.

 

[elliot]

Just for clarification, this is a number that you came up with. I haven't thrown out any numbers.

A Java or C++ developer with Fixed Income product knowledge deserves 100k in NYC.

---------- Post added at 12:16 AM ---------- Previous post was at 12:13 AM ----------

Out of curiosity, how much do these appartments cost ? To buy? To rent?

A quick google search shows that there are more Asian cities amongst the top 10 in an index of the costliest cities of the world.

Vikram Pandit's aparatment costs about 18million
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[AnoopRN]

And I know hedge fund pays much higher than IB in terms of salary (usually 10k+ plus bonus). Is it a possible career path for Tech analyst in IB that jump to hedge fund after couples of years? I thought the trading strategies between hedge fund and IB are totally different.

Ryan, in the initial phase of your career, you should be more bothered about studying this industry and enhancing your skills. Career choices must not be dictated by money alone. This is a common pitfall.