LO AM Salary Negotiation
I'm heading into my 2nd year in LO AM space and scheduled time for performance review and salary negotiation. I wanted to get a better understanding of the market so that I could be better prepared for the chat. This is my profile:
- Our team manages just under 10 billion in AUM, 6 investment professionals each covering 1~2 sectors
- My sectors have performed better than most other sectors in my team. Two sectors ranking 2nd and 4th in stock selection (although underweight in both)
- I do all of the coding for the head PM on macro analysis and risk management
- Current comp: 130K all in, 100K base
- I have masters degree in finance but no MBA
I see a lot of figures around in WSO and the discrepancies are rather large between contributors. Also, I'm guessing masters degree doesn't equate to MBA when it comes to salary consideration. I would very much appreciate any sort of figure or range of figures that the market pays for a person in position similar to mine just to have a better idea of what to expect and how to position myself.
Thank you in advance!
Assuming you are not EU based (terrible comp) the you are very underpaid assuming you are a true “covering” analyst independently covering those sectors/generating ideas through the full lifecycle AND doing the coding.
I’d argue the gap is so material you will probably have to leave to close it bc it will be unpalatable to the PM to increase you that much.
Thank you for the insight! Would you know roughly the range that the street pays for someone in a similar shoe? I'm not sure if I'm that grossly underpaid granted I'm not a traditional hire - meaning, I did not take the normal route of doing a few years in sell side research. I did a pseudo-lateral from BO to FO within the same firm and was given two sectors that were smaller in size due to the nature of the strategy (stable/mature sectors in growth portfolio). I've replaced all of the names within my sectors with my picks and was fortunate to have done well this year.
Yeah makes sense then for the internal transfer, but at a certain point what you did before doesn’t matter that much if you have enough exp in current role. I’ll leave it to others who have more exp on equity comp but I’d get my 3 years in then try to upgrade unless they up your comp a lot internall.
Echoing the earlier comment, you are severely underpaid if you're in the US, especially if you're living in a HCOL city. I've been in the industry for 5 years now (and I'm in fixed income) but when I started fresh out of undergrad my base was 85k with a total comp of 120k. For your level of experience, i would be hoping for at least 150-175k assuming you are truly the lead analyst in your sectors.
Thank you! Super helpful!
You’re getting screwed. You’re an analyst, do the math on fees/head and you’ll see how ridiculous that comp is.
Hmm...
$10 billion AUM
1% fee = $100,000,000
60/40 split between firm/team -> net to team = $40,000,000
Roughly per head = $5,700,000
70/30 split between firm/team -> net to team = $30,000,000
Roughly per head = $4,300,000
If you look at it this way, it does seem that I'm getting screwed... but the thing is, I just got onboard last year and got my 1st year under my belt... not sure how to compensate for seniority or YOE in this case, but it sure doesn't make sense to pay 1st year analyst $4.3M...
Would you know roughly the range of what a 2nd year analyst (no MBA) makes?
A lot of it depends on your strategy, but your base should be at LEAST 150k if you have full coverage of your sectors. Your bonus should really be tied to performance of your coverage (assuming it’s not right now?)
I've seen plenty of situations like this, especially with non-traditional/young analyst hires. You are getting screwed and if you don't see a significant boost in comp for your second year, your next move should be working to become the best analyst you can be while recruiting quietly for a new position. Keep doing good work because it gives you pitches to talk about in interviews but if they don't bump you to $150k+ base + 50-100% bonus, they are underpaying you. This is assuming you are generating performing ideas on your own.
Near-term, there likely won't be much of a negotiation for next year's comp but you can ask about line-of-sight to what drives future increases in comp and what the number should look like if you keep performing at this level. Maybe they just underpay everyone for the first couple of years but more likely than not, you will have to move on to get paid.
Source: In this exact position myself before moving on to a large boutique for market post-MBA analyst pay.
I’m in a similar position to you. Working a large AM in london. I’m on £67k base and £28k bonus. Total comp is less than £100k. I also came through a non-traditional route but I’ve completed 3 and half years. I’ve accepted things won’t change and just spending the next 18 months getting very good at my sector coverage and will go to market to boost my comp at 5 years experience
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