Less than one year after implementing new "protected weekend" policies for junior bankers, some of the biggest Wall Street firms have decided to pay them more, too. Goldman Sachs, JPMorgan Chase, and Bank of America are all planning to increase salaries for junior bankers by at least 20 percent beginning in 2015. The move is expected to bring the base salary (before bonus) to around $85,000 for analysts at Goldman Sachs, and likely something similar for JPMorgan and Bank of America.
Is Wall Street going soft? Some seem to think so. "Analysts at Goldman May Have the Perfect Entry-Level Job," Businessweek declared yesterday. Suddenly, those 90- to 100-hour workweeks aren't looking so bad. On the other hand, it's possible that base salaries are being increased to compensate for another, less encouraging shift in the industry: lower bonuses. Before the financial crisis, top-tier bonuses at big banks were expected to well exceed the base salary and easily top six figures. But word on the Street now is that the highest bonuses for analysts are now closer to $70,000.
When I checked in with several junior bankers late last month about how policies designed to free up their Saturdays and Sundays were working out, a few expressed concern that this perk was just one way of making up for lower bonuses. "A huge perception among folks I've talked to is that the reason these policies are becoming more important is because banks don't pay the way they used to," a source at Bank of America told me at the time. "If you ask any junior banker, they would rather get paid the way bankers used to be paid and work the way bankers used to work than have protected weekends."
Of course, a 20 percent raise is a big increase, and $85,000 is a lot to make straight out of college. But if it's true that bonuses in banking still haven't bounced back (and the New York Post noted that Goldman at least has no plans to change those) then the salary raise might be similar to protected weekends—something that makes junior bankers happy in the short term, but leaves them feeling disgruntled when those smaller bonuses roll around.