Monthly Archives: August 2011

What is your number?

The salary and compensation given to you from your employer is a measurement of several different factors–your worth to the company, the intersection of supply of qualified labor and demand for the position, and to provide incentive to retain your abilities.

Entry level bulge bracket financial analysts make 70 base, 10 signing bonus, and a year end compensation package labelled as a ‘retention incentive bonus’ that ranges between 0 to 70 (varies slightly by bank and group, but largely determined by your eagerness to take it in your ass). For every year, your base salary grows by 10. When you become an associate and actually join the bank (a conscience decision to be in finance for life), you receive a 40 signing bonus and your base becomes 125. You will receive your first real bonus on the same cycle as the rest of the bank–within six months of the signing bonus. All that money, of which gives me the sneaking suspicion that the money is there to make us feel better about how horribly soulless the job is. The compensation must be good, otherwise no one would want to do it. People would leave to go work in other industries.

If we look at banking through this lens, that the pay is inversely correlated to the satisfaction or joy derived from the work, then banking must be the among the worst jobs one can possibly have (arguable, of course; other influencing factors include prestige and allowing your chinese mother something to say to ther chinese mothers at dinner parties). Banking consumes your entire existence because of the hours. You are owned by the corporation.

Everyone has a number. The number is the threshold amount of money he/she needs to keep from leaving wall street. Even though some people claim they are principled and will leave no matter how much the pay is, their numbers are probably higher than most.

The number is also based on several different factors. How important money is to you is by far the most significant, and that is determined by your spending habits, your indebtedness, and your age. For young people with no families, the number is not that important. I spend all my money on alcohol. Though i like microbrews, i could go back to the old english (extreme example).

Andy

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Checking in

The ubiquitous nature of these geolocation apps.

 

 

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Tips for managing directors

When one finally makes their way across the desert to reach the oasis of becoming a managing director, the bank issues them this short note, along with a large base pay raise and the key to the firm’s cafeteria (of course once when you have money to spend on $5 subway footlongs, you end up getting free meals at work).

—–

Congratulations <insert> on your transition from a corporate nobody to a respected member of this fine institution.

You made it.

You are now allowed to dine in the firm cafeteria that serves such expensive delicacies from filet mignon from cows that are raised for the sole purpose of providing that cut (the rest of the cow is thrown out) to shark fin soup (likewise, the rest of the shark is tossed out). You are also now allowed to make eye contact with the senior executives (but no touching unless it is consensual). Please see below a few notes to abide by to make your managing directorship as comfortable as possible.

– use the bathroom during the weekly staffer meeting to avoid awkward encounters with analysts at the stalls
– you can leave the office at anytime if you have an office
– feel free to create as much unneccessary work for the analysts for your own self improvement (why read the wikipedia page if you can make your analyst summarize everything and format it into a nice presentation?)
– dont make eye contact with analysts in the elevators, otherwise they will begin inane conversation with you and distract you from thinking about what yacht extension to purchase for your schooner
– dont get too attached to the analysts: they are dispensable and change every year

Again, congratulations on achieving your lifelong goal of becoming managing director. Please inspire in the junior members of the firm the dream of one day reaching MD by acting like a priviledged, self-righteous demigod.

——-

Andy

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Bonus postulation

Yesterday, two important events happened.

1) i started this posterous so i can postulate relentlessly, and
2) i got my bonus number (to be funded in my bank account next friday).

Citi, like most bulge bracket investment banks, promises glory, allure, and prestige; you just have to have the gaping, desperate, corporate hole to withstand ‘taking it’ for the majority of your existence in order to achieve them. The bank reminds you everyday that you want it–the models and bottles, the envied lifestyle, the slim chance that you will make Managing Director by the end of your career and enter the exclusive world of the cultured elite–by hanging a glamorous carrot in front of you in the form of a performance compensation (which the bank keeps you in the dark regarding the entire process: when you will get your review, when you get your bonus number, and when it will be funded, that i honestly thought i would find out my bonus number first through popular wall street blog, dealbreaker); allowing you, an underqualified recent graduate struggling to maintain a laundry schedule, feel a false sense of self-righteousness by giving them absurd responsibilities (‘should we lend this company $1Bn?’), all at the same time raping you senseless and numb. You will feel priviledged for having a job and prestige for being so close, yet so far, from working with corporations that essentially run the world. Finally my mom can engage in conversation proudly to other asian moms when the topic turns to their children (which i would say conservatively is 90%).

Due to my dichotomous sentiment towards banking, I watched the 2008-2009 financial and economic crisis partly with a sort of twisted, perverse glee, vindicated briefly from my dirty pursuit to join the ranks that are so motivated by short-term performance to throw recklessly into the wind the long-term stability of the public, yet at the same time felt hopeless, seeing the value of my nyu stern-banker-technical school finance degree and my future career crash into the ground as fast as people were selling their lehman positions.

But i tried it anyway, the big game of wall street. It was the masochist in me, that pushes me to my limits, that see if i had it in me to withstand hours of excel spreadsheets and word documents. First, determine your objective: long term career, short term bonus. Then play accordingly.

It tests a wide range of human tolerance: emotional (‘why the fuck doesnt EBITDA match the one in the model?’), physical (‘i need to find the one restaurant on seamless that has at least one redeeming nutritional aspect’), and mental (‘you need to complete three credit approval memos by tonight. Client needs a response tomorrow’). All at the same time, knowing whose cock to rub in the office.

In the short to medium term, your performance (read: the size of your bonus) is not a close indicator of your skills. Your performance rests solely on how the managers perceive you. You can deceive them, so long as you dont get caught (by completing or volunteering for tasks that are high visibility, but ignoring behind the scenes work). However, in the long run, your performance is tied to your abilities. The success of a career depends on the person.

So i played the game and did allright for myself. I learned a lot, not just about financial markets or structuring a transaction, but about working with other people, managing expectations, and drinking myself senseless to stay sane (bear fights: jager bomb then irish car bomb). It has been a wildly (boring) year and i think i am ready for a change.

Or so i (incorrectly) postulate.

Andy

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