Investment banking is known for having high salaries, especially at the managing director (MD) level. However, compensation can vary greatly depending on the firm, department, and region. For example, MD salaries at top US investment banks like Goldman Sachs and Morgan Stanley can exceed $1 million, while MDs at European banks may make closer to $500k. Salaries also tend to be higher in front office roles that generate revenue like M&A advisory and trading versus middle and back office roles. In Asia, international banks provide allowances on top of base salaries. Within the same bank, an MD can make over 5 times more than an entry-level analyst.
US Bulge Bracket Banks Pay MDs $1M+
Top US investment banks known as “bulge bracket” firms like Goldman Sachs, JP Morgan, Morgan Stanley, and Bank of America tend to pay MDs very highly. Average MD salary ranges from $400k base to over $500k base, with bonuses bringing total compensation to $1-1.5 million or more. Exact numbers depend heavily on the deals and revenue an MD brings in. These banks rake in billions in fees annually from high profile IPOs, mergers, debt issuances, and trading activity. The top performers are rewarded handsomely as a result.
European and Asian Banks Have Lower Ranges
While US banks pay handsomely, salaried tend to be lower at European and Asian banks. MD salaries at European banks like Deutsche Bank, UBS, and Credit Suisse are roughly in the $400-500k range. Banks in Asia offer lower base pay but provide additional benefits like housing allowances worth $20k or more annually. Newer boutique firms also pay less than the bulge bracket names. So location, brand name, and business lineup affect compensation numbers.
Front Office MDs Make 5x+ Analyst Pay
Within investment banks, there is a clear hierarchy and massive pay gap between senior and junior roles. MDs sit at the very top after working their way up over a decade or more. They can make 5-7 times more than entry-level analysts with just 2-3 years experience. Analyst salaries start from $80-125k while first year MDs pulls in over $750k in salary and bonus. The bonus portion accounts for most of the upside, especially for MDs and other revenue generating roles.
In summary, MD salaries at top US investment banks clear $1 million but vary across firms and geographies. Front office MD total compensation is many multiples higher than junior roles within the same firm.