Regional and boutique investment banks typically pay lower base salaries compared to large, bulge bracket banks. However, they offer greater opportunities for carry and partnership that can boost total compensation over time. Key factors determining pay at regional banks include bank size, sector focus, deal flow, founder backgrounds, and career stage.
Base salaries at regional banks below large bank levels
As the anonymous user’s analysis shows, base salaries at regional banks generally range from 30-50% below salaries at tier 1 banks like JPMorgan and Goldman Sachs. For example, a Vice President at a top boutique may earn around $200k in salary and bonus compared to $300-400k at a bulge bracket bank. However, smaller banks provide faster paths to higher positions with more carry.
Carry and partnership opportunities boost earning potential
Although regional banks pay less in cash compensation, opportunities for carry and partnership can greatly increase total earnings long-term. For example, becoming a Principal or Partner allows participation in the carry pool and earning a percentage of investment profits. This creates uncapped earning potential compared to the salary and bonus caps at large banks.
Bank size and sector focus determine pay levels
Pay levels within regional banks can vary substantially based on size and sector expertise. Well-known sector specialists like Centerview or Perella with $1B+ in revenue generally match salaries at tier 2 banks. Meanwhile, early-stage banks with uncertain futures may pay below market with minimal carry.
Career stage impacts priorities and fit with regional banks
Junior bankers may prioritize training and exit opps from tier 1 and 2 banks. However, mid and senior bankers may value greater responsibilities and control at regional players. Fit depends on short-term vs long-term career objectives and tolerance for risk.
In summary, regional investment banks provide lower base salaries than large banks but opportunities for carry and ownership. Pay levels and structures vary based on bank size, sector expertise, deal flow, and career stage.