What is the investment bank hierarchy?

Investment banking analyst. This is the lowest position and an entry-level one. Although most investment banking analysts do 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 very little sleep. In general terms, the position breaks down as part investment analyst, part computer tech, and part personal assistant to higher personnel. They have an average base salary of around $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 a first-year associate far differently than a second-year associate and so on. Most first-year associates spend their days overseeing investment banking analysts and perform some of the same tasks as well. They play a group leader or managerial role to analysts. Associates must be skilled in communication because they often act as liaisons between senior banking officials and their team of analysts. 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. This role is the most junior of the senior banking positions. Once an employee reaches this level their opinions and thoughts are seriously considered by other senior banking officials. An investment banking vice president has two major objectives. The first is completing pitch books and the second is managing client relationships. In a typical investment deal, a vice president will coordinate a team of associates to devise and draft a pitch, and then communicate with clients. Much of their duties involve the delegation of tasks to lower-level employees. To be a successful vice president one must seek to develop deep and long-lasting relationships with clients and senior banking officials. 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. Life as a senior vice president is vastly different from the lives of analysts, associates, and investment VPs. 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. This is the top role of the investment banking hierarchy. Most can not reach this position, as it takes a long time, a significant amount of skill, and even some luck to do so. The buck stops with the managing director of an investment bank, as they have top authority and are accountable for the profitability of the bank. A managing director must keep track of how all deals are progressing and stay abreast of any changes in the political or economic environments. Managing directors only take an active role in deals if the deal is deemed to be of the utmost importance. Mostly they play kingmaker amongst the VPs, by promoting effective VPs, and dismissing ineffective ones. A managing director must meet a bank's profit objectives during certain increments of time, or they are replaced. 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.