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Every year, Wall Street brings in a new batch of young, hungry analysts and associates fresh out of college or business school. There’s a possibility that one day some of these young finance professionals could wind up in the C-suite.
While everyone know the CEOs take home some really handsome pay packages, they’re not the only ones racking in the big bucks.
Just outside of the corner office, there are a handful of high paying jobs on The Street.
Last fall, Business Insider spoke with Odgers Berndtson recruiters Steve Potter, the managing partner of the US business, and Glenn Stevens, a partner with a focus on financial services, about these high paying jobs in banking, hedge funds and private equity.
While there are certain things people can do to work toward one of these highly coveted positions, there’s no set path.
“The path to the top with each job is different,” Stevens said.
The general rule on Wall Street is to graduate from a top 20 university for undergrad and then do an analyst program.
After a few years doing the Wall Street grind, it’s time to enroll in an MBA program at a top business school and return as an associate.
Upon returning to Wall Street, an associate will strive to become a vice president, then a principal, a managing director and so on and so forth.
“You have to pay your dues and pay your time,” Stevens told Business Insider. “You have to reprove yourself every year.”
One thing to keep in mind is Wall Street is a meritocracy, meaning it’s one of the most merit-based industries.
“It is ruthless on underperformers,” Stevens said. “It’s an alpha business.”
That being said, we have compiled a list of the nine top paying jobs on Wall Street, the salary ranges and some tips for what it takes to get there.
Ever since the financial crisis, the position of chief risk officer has become more and more in demand. That's because of bunch of firms missed the risk function in a big way back in 2008.
The CRO can be a seven-figure salary position, according to Potter. The salary can range from $1-3 million.
What does it take to be a CRO?
The CRO is likely going to be someone who was on the trading side and came up the fixed-income trading route. This person has demonstrated multifaceted skills in a number of different areas, Potter told Business Insider.
The ideal candidate has to understand a lot of complex products and know how to analyse and manage the analysis of some pretty complex risk and reward formulas in the firm.
'This is a bright person with a lot of product knowledge and interface with people,'Stevens said. 'They have a 50,000 foot wisdom to recognise the risk inherent in all of these products and how these product move relative to one another.'
The chief compliance officer is the point person for making sure the firm is in compliance with laws, regulations and internal policies and procedures.
The position of the CCO has been around for a long time, but it has become increasingly important with the recent spate of financial regulations hitting the industry.
'It's very important now because they have gotten very serious about compliance,' Potter said. 'There is an increased regulatory environment that you need a full-time dedicated staff just to keep up with all of them.'
According to Potter, a qualified CCO will probably have a law degree and/or an accounting degree. They will also have spent some time working in a regulatory agency and a law or accounting firm.
They might have previous experience working at FINRA, the CME or the SEC, just to name a few.
The salary range for the chief technology officer can range from $2-3 million.
The chief technology officer would begin their career after graduating from a top tech school as a programmer building trading systems and helping to write code.
'Ideally, in order to do well, you need to understand trading strategy and how you can give your traders competitive advantage relative to the market,' Potter said.
'To get to the level at a big bank you are an extraordinarily quantitative person who understands all aspects of technology and stays current with it,' he added.
The CTO candidate also has to have the right personality for the job.
'You have to combine other sets of skills, which is you take a very quantitative technological and introverted personality and within this job you need to manage a large group of people and you have to be comfortable in the boardroom with teh CEO and management to support them.'
The position of CTO is a really difficult job to fill because just understanding it alone isn't enough.
The head of M&A, or head of any major group at a bank, can make a range of $2-6 million, Stevens told Business Insider.
'I've seen them make more, but things aren't that great.'
How does one get to this level?
The first three to five years of the M&A head's Wall Street career is an introverted job as an analyst -- punching numbers, getting presentations ready and doing internally focused work for managing directors, according to Stevens.
Once they succeed on that level they take that knowledge they earned as an analyst and go to business school for their MBA. Then they join a bank as an associate and work their way up the ladder from an associate to a vice president and then to the point where they manage teams.
That's when it starts to get tricky.
'They are expected to go out and call on clients and shift into relationship sales mode. A lot of people fail because they are now expected to grow into something they haven't been all that well trained to do,' Potter said.
Potter added that the best candidates are the ones who are in constant dialogue with CEOs and have a massive Rolodex of contacts. What's more is they are also extremely proactive.
The head of an I-bank can make $3 million at a smaller firm and make a range of $7-8 million at a larger bank.
The ideal candidate has great management skills and an deep knowledge and understanding of the business. This person also has a personal track record that is credible.
An i-bank head is tasked with a multitude of duties and responsibilities. For example, the I-bank head makes the hiring and firing the decisions. He or she also determines the firm's market strategies and deals with clients.
'It's more of a managing position,' Potter said.
This person will come from a top tier school and start on Wall Street as an analyst. Then they will eventually move on to receive their MBA and return to Wall Street an associate and work up the ladder from there.
Another key characteristic is the ability to be a political operator.
'You have to be a good political operator because banks are fairly political institutions,' Stevens said. 'You are managing egos both up and down and not letting your own ego destroy yourself on the ride.'
A top partner at a private equity firm can take home a cash payout of $2-5 million plus carried interest
High paying private equity jobs are found at those firms in the top quartile that are producing returns that investors are looking for.
'Your top partners are probably getting a cash payout in a $2 to 5 million range plus carried interest,' Potter said.
Stevens added that the management fees for those firms with billion in AUM can add up quickly to cover the overhead costs at these firms.
Banks started shedding their proprietary trading units to comply with the Volcker Rule -- a provision of the Dodd-Frank financial reform bill.
However, where prop trading is still in existence, which is mostly on the private side, it remains a lucrative career path.
'Prop traders can make a significant amount of money,' Stevens said adding that some can make $2 -3million depending on the kind of revenues they generate.
However, that $2-3 million number is just a range. It could be more than that, Potter said.
A head of research at a hedge fund can make $2-3 million on the low side and multiples of 10 depending on the fund
At a hedge fund, the head of research, or a person responsible for a sector of research, would be making a lot of money, according to Stevens.
Research is extremely important for hedge funds. For example, Ray Dalio's Bridgewater Associates, the largest hedge fund in the world, has a huge emphasis on research and data driven analysis.
The payout depends on the fund. The range could be $2-3 million on the low side to multiples of tens of that, according to Potter.
Chief traders at hedge funds can make $1-2 million on the low end and $15-20 on the high end and possibly even more
Hedge fund traders have ability to make a lot of money and they key traders would be highly compensated.
The lowest range is $1-2 million and the highest can range from $15-20 and possibly even higher.
'More sales and trading are working their way into hedge funds,' Stevens said. 'Hedge funds and private equity are the highest payers in the financial universe no doubt.'
'If they produce good returns they are paid very, very well,' Potter added.