2013 Associate to VP Compensation Report

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A bank by bank breakdown and an overall compensation summary by level.

 

Following the boom years of instant gratification, we have had almost five years to adjust to an era of practising the virtues of patience, self-control, and willpower. It feels like we have all been part of the infamous Stanford Marshmallow experiment. Time for the payoff?

2013 has had a breathtaking start. Equity markets have raced upwards, M&A activity and volume is gathering momentum, and the mood within the Private Equity sector seems to be improving. However, it still feels a little fragile (UK downgrade, High Street blood bath), and whilst we all want to believe that we’ve turned a corner, we’re not yet at the point of receiving two marshmallows.

Relatively speaking, “flat is the new up”. The data gathered from our survey suggests that whilst the market has stabilised, bonuses are still drifting downwards from the giddy heights of 2006 but that the pace of decline has slowed. Broadly, base salaries are flat and bonuses are down 10% on average. As with last year, a wide spread of numbers remains, with “doughnuts” still prominent. The division between winners and losers continues.

On a more positive note the deferred portion of the bonus seems to have reduced too. It seems to have fallen from an average of 40% for associates and 60% for VPs 2012 down to 25% at both levels in 2013. So whilst the quantum might be lower, you receive more up front.

As we all know from our Economics 101 class, a pound today is worth more than a pound tomorrow. The recruitment market has started the year with a little more snap and crackle. We’ve seen a noticeable uplift in active mandates across all areas, but with particular appetite in M&A, Private Equity, Corporate Development and Strategy.

It seems early in the cycle to be talking about a return of “The War for Talent” but the competition for the best, most intellectually agile workers never went away, even during the toughest hiring years. If you’re a firm immersed in the war, how do you win? Take hiring seriously. It’s very often put on the backburner, whilst the more practical matter of “doing the day job” takes priority.

Prospective candidates will become employees who are the lifeblood of your firm. Ease the burden by partnering with a good head-hunter. Get it right, and we’ll be evangelists for you and your firm. For a full copy of the survey which includes a bank by bank breakdown and an overall summary by level, please get in touch with us.

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