Morgan Stanley plans to raise junior banker salaries by 25%, according to Bloomberg.
This move shouldn’t be that surprising. Wall Street banks have been implementing a variety of strategies — including actually giving them weekends — to improve the quality of life of their junior employees. The world isn’t what it used to be. Banks face competition from for their talent, especially from the tech sector.
This pay boost specifically targets associates and vice presidents, people in their late 20s and early 30s who are easily poached by private equity firms and hedge funds, or who might want to take a few years to get their MBAs, only to never return to the bank.
Associates at the largest investment banks can earn base salaries of $US85,000 to $US180,000, according to New York-based recruitment firm Options Group Inc. Salaries for vice presidents can range from $US120,000 to $US250,000, according to Options Group.
Bonuses take those figures even higher. Total pay is usually determined at the end of a year. For 2013, Morgan Stanley deferred at least half of bonuses for any employee with total pay of at least $US350,000 and incentive pay of $US50,000, a person briefed on the policy said in January.
For the record, a 25% pay increase in base salary also means a 25% bonus pay increase.
Gotta get that in.