What is the banking hierarchy structure?

The banking hierarchy structure consists of a strict job title structure employed by most investment banks, and starts with an investment banking analyst at the bottom, and ends with a managing director at the top.

Here is a more detailed look at the banking hierarchy structure:

• Investment banking analyst

This is an entry-level position. Most investment banking analysts come from top colleges and universities. They spend their workdays taking orders from investment associates and directors. They often utilize programs such as Excel, and PowerPoint.

The role is notorious for long working hours and little sleep. In general terms, the position breaks down as part investment analyst, part computer tech, and part personal assistant to higher personnel. They earn an average base salary of $100,000 per year.

• Investment banking associate

One rung up the investment banking ladder is the investment banking associate. It can be hard to categorize this role because many companies treat first-year associates far differently than second-year associates and so on. Most first-year associates spend their days overseeing investment banking analysts and performing some of the same tasks as well.

With bonuses and other compensation, a first-year associate can earn up to $225,000 per year, with a base salary of around $150,000.

• Investment banking vice president

Next up the chain is an investment banking vice president. An investment banking vice president has two major objectives. The first is completing pitch books and the second is managing client relationships.

Salaries with this role vary but are generally in the $200,000 per year range. However, the bonuses that come with the investment banking vice president position are often valued at more than their annual salary, meaning some can make half a million dollars or more in a single year.

• Senior vice president

This role is second from the top of the hierarchy and can also be referred to as executive director or principal. For many in the investment banking industry, this is the highest role that can be obtained.

Their main objectives and responsibilities fall under the prospecting and allocating of new business. Senior VPs often do a lot of traveling because of this. Their annual salaries range from $500,000 to $1 million per year, and that is before bonuses.

• Managing director

Managing directors only take an active role in deals if the deal is deemed to be of the utmost importance. In a bad year, a managing director won't make anything more than their base salary, which is generally close to or above $1 million. However, in a really good year, they can have multi-million dollar salaries when their bonuses are included.