Goldman Sachs has relented. As per widespread reports, the bank has increased pay for its juniors, following just about every other bank which has done the same in the past few months.
As the chart below shows, Goldman hasn't just increased its salaries to the new industry standard of $100k for first year analysts in the investment banking division: it's gone higher and increased them to $110k.
As a result, Goldman now occupies the salary top slot with Bank of America and the comparatively little known boutique William Blair. The Goldman Sachs salary discount for juniors seems to be a thing of the past.
Goldman has also hiked second year analyst salaries to the top of the market, and has positioned its associate salaries at $150k. The associate salaries don't look so generous - until you remember that Goldman's associates are mostly just the same as third year analysts anyway.
Unlike Citi, Barclays and Bank of America, Goldman doesn't appear to have hiked salaries for its vice presidents (VPs). This could cause a few issues as VPs at the firm see the differential eroded between their own salaries and those of juniors.
Goldman's analysts are due to receive their August bonuses in the coming weeks. Until now, the firm had been suggesting that it would hold salaries steady and increase bonuses instead (one Goldman insider told the Financial Times that increasing salaries would simply attract mercenary youths). The fear will now be that because salaries have been increased, bonuses will be held steady. Goldman declined to comment on whether the salary increase will be backdated.
While most banks have now increased junior banker salaries (Credit Suisse has remained imprecise about its own increases), the boutique banks that previously paid the most have yet to respond. The expectation is that they will increase junior banker salaries higher still sometime soon.
Photo by Adam Kring on Unsplash
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