Getting into investment banking can be one of the most lucrative sectors for a young professional to enter, but it has lost a lot of lustre in the decades since the 2008 financial crisis. A leaked document of now defunct investment bank Lehman Brothers revealed compensation figures for 328 investment banking division (IBD) associates; despite ramping inflation and a heightened cost of living, pay for associates today is way lower.
The average compensation among Lehman IBD associates in their second year upwards was $311.3k. Based on data from our 2024/25 salary and bonus report, the average compensation among all front office associates today is $184.1k. Pay for IBD associates in modern ‘Tier 1’ banks is only marginally better, at $209k on average.
The Lehman document broke down the associates into high and low performers. They’re split into five separate tiers (1, 1/2, 2, 2/3, 3) with the higher number indicating low performance. Average compensation among the lowest performing tier of associates was $125k; while that sounds fine, if you adjust for inflation those low performers received the equivalent to $188.3k today, more than IBD associates on average today.
The highest earning associate at Lehman, who worked in an equity capital markets team in London, earned $600k. Its top performers earned an average of $401k, equivalent to $603.5k today. Nowadays, you’ll only find that kind of junior pay at an electronic trading firm like Hudson River Trading instead.
Lehman said in the document that it paid its juniors “competitively with our peers on the Street in order to protect our talent,” but did so “in a responsible manner.” It also remarked that although 2007 was a difficult year, “we’ve been through challenging years before, and we’ll get through this one as well.” Famous last words.
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