Your phone rings and from the caller ID you see it's the head of your group. The big daddy. The brass of the brass. A big swinging dick (to borrow a term from Liar's Poker). He wants you to swing by his office. He asks that you walk in on your knees so as to make things go quicker. Okay fine, maybe that last bit isn't true, but that's how most analysts felt walking into these types of situations.
You sit down in his gigantic corner office with spectacular views of Manhattan. He tells you the following -
[insert analyst name], you've been a tremendous asset to the group this year. As you know, in our business we reward those who we value. We consider you a top analyst here at [investment banking firm]. Take a look at this and tell me what you think.He gives you a piece of paper with a number written on it. This is so old school, I think to myself. Anyway, this number is supposed to make all the ridiculous hours you spent working the past year justifiable. It plays to your greed and makes you think, maybe I can do this another year. You take a quick peek, smile and immediately offer your thanks. You never tell him what you think, that's a big no-no. Just take it and go as Russell Peters would say.
As twenty-three year olds, most investment banking analysts walked out that day with an additional $60,000 pre-tax in their pocket. That means for the year, they probably made around $120,000 pre-tax. That's a shit ton of money for a twenty-three year old right out of college. In fact, analysts starting in 2007 probably could've made $150,000 all-in if they had just graduated a year earlier and started working in 2006 before the whole financial meltdown began in mid-2007. An analyst bonus of $60,000 reflected bad times. Bad times indeed.
I was inspired to write this post when I was trying to figure out how much money I'll be "minting" next year as a public high school teacher. Per the Department of Education's handy salary schedule, you can see exactly how much teachers make based on longevity and education. You can see that the number of years a teacher spends in the system (longevity) is represented by the rows (e.g. 3A/3B = 3rd year teacher). The columns reflect additional pay bumps for teachers who have obtained more credits and degrees.
Per this chart, the average twenty-something public school teacher in New York City probably makes anywhere between $45,000-$55,000 per year (depending on your experience, education, etc.). Teachers don't get annual bonuses or performance bonuses. Maybe some overtime, but that's about it. What's truly sad is this: if a teacher spent twenty-two years (last row) in the system with a masters, they would make $100,049 per year at a maximum. That's still not as much as investment banking analysts make as twenty-three year olds. Awesome.