Finance

Morgan Stanley hikes junior banker salaries to $100,000

Morgan Stanley has raised base salaries for entry-level bankers to $100,000, leaving Goldman Sachs as the last remaining Wall Street bank yet to hike pay for juniors.

The US investment bank has increased pay to $100,000 for first year analysts, according to people familiar with the matter, while those in their second year will receive $105,000. The salary increase will be from 1 August and rises from $85,000 and $90,000 respectively.

In London, the rise will take first year analyst salaries to £60,000 and second years to £65,000, according to the people. The bank previously paid £50,000 and £55,000 respectively.

Morgan Stanley follows Citigroup, JPMorgan, Bank of America, Barclays, Nomura and UBS with pay rises for juniors in recent months as young bankers have increasingly quit the industry in the wake of spiraling working weeks.

Six-figure starting salaries in the US have now become the norm for first year analysts, while similar percentage uplifts have been rolled out in other global locations.

READ These banks now pay 20-somethings starting salaries of $100,000 or more

Banks are coupling pay rises with recruitment sprees and changes to working conditions in a bid to stem a burnout crisis in the sector. JPMorgan is hiring an additional 190 analysts and associates, Financial News reported, while Goldman Sachs is increasing recruitment as well as automating more junior workloads.

READ View —  Why solving banker burnout is far from simple

Junior banker workload has long been brutal, but has been thrust into focus in recent months after a group of Goldman Sachs analysts leaked an internal presentation detailing 100-hour working weeks and declining mental health.

The US banking giant has yet to increase junior pay, but chief executive David Solomon hinted that a compensation hike could be forthcoming during the August bonus round for juniors during the bank’s recent second quarter earnings call.

At UBS, junior pay has been increased at numerous levels. From 1 August, first year analysts will receive a salary of $100,000 — a $15,000 raise. Second year analyst salaries are $105,000, and are $110,000 for those in their third year. At associate level, salaries have increased to $175,000 for first years, $200,000 in the second year and $225,000 for third years. Director level salaries increase to $275,000.

Credit Suisse, Houlihan Lokey and Moelis & Co have also handed out one-off bonuses to their junior bankers in recent months.

To contact the author of this story with feedback or news, email Paul Clarke

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