07 August 2014
Author: The ExecuSearch Group
According to the New York Times DealBook, Morgan Stanley is expected to be planning an increase on base salaries for junior and mid-level bankers. The increase, which is estimated to be an impressive 25%, will be implemented with the purpose of improving working conditions for professionals who typically rely on bonuses for a large part of their income. This is great news to anyone looking into investment banking and capital markets as a career. Other banks will likely follow suit with their own compensation down the line, creating a higher base salary for these professionals across the board. “The increase in pay is a good sign for the economy and the state of the industry,” says Sara H. Katz, Director of Financial Services at The Execu|Search Group. “It means Morgan Stanley is confident in future stability and continued success, not only of the company but of the investment banking field as a whole.” Though the Associate and VP-level positions that are affected by these increases are typically held by professionals three or so years out of school, this move is one of many that major banks have been taking to work on attracting new grads as well as retaining current staff. Following the economic crisis in 2008 and the recent adjustments to new policies and regulations, a decreased interest in the field and lack of experience in the new regulations has resulted in fewer available candidates and an ultimate skills gap that still affects the field to this day. The salary increase may not necessarily mean a simultaneous jump in bonuses, but this is still excellent news for those looking for a higher, more reliable cash flow in their careers. “Base salaries haven’t been raised in a while, so this is great for incoming 2015 grads and those working their way up to the Associate and VP levels,” says Sara. This increase also gives investment banks the opportunity to retain staff on the sell-side rather than lose them to private equity firms and hedge funds on the buy-side for higher compensation. Since work-life balance is a common complaint in the investment banking field, the firm is also using the pay hike to actively attract and retain its talent against the booming technology sector, which is quickly becoming known for high salaries and flexible work-life balance.