Ever-increasing automation at investment banks has provided senior tech professionals (i.e., those at the managing level) with much more clout than they held previously. Along with greater responsibility has come better job security and bigger pay packages, particularly for managing director-level hires who are charged with guiding major projects.
Just how much do these tech-centric managing directors (MDs) earn? The answer, of course, is dependent on a variety of factors, including where they are based, and whether the MD is in retail, corporate or investment banking, along with the size of the bank.
“A lot of senior [tech] roles have been migrated to Florida and Texas because of the lower cost of living and lack of state taxes, enabling companies to come in a touch lower on compensation,” said one New York headhunter who specializes in tech placements at banks.
Unlike roles in M&A and sales and trading, where revenue generation is directly correlated with incentivized compensation, bonuses for tech MDs often depend on the successful completion of major projects such as moving infrastructure or data into the cloud, or outsourcing big chunks of development offshore.
Still, there are ranges for managing directors. For the chart below, we asked executive search firm Pinpoint Partners to walk us through the salary and bonus figures fleshed out in their 2019 compensation report, cutting out the top and bottom 10 percent in an effort to exclude anomalies and provide more specificity. The data focuses on more traditional back-office IT roles rather than quants or people who work with next-gen technologies such as artificial intelligence (A.I.).
As you’d likely expect, bulge brackets tend to pay the most, followed by elite advisory firms and then mid-market investment banks. The top end of the managing-director ranges mostly include CTO and CIO-level employees, while the lower end is made up of MDs who are running teams on a day-to-day basis, such as a head of IT operations or information security, according to Olly Hopping, a director within Pinpoint Partners’ tech division. Elite boutiques have a tighter range because they are smaller and often rely on the same person to handle both levels of responsibility, Hopping added. As with most investment banking roles, the percentage of bonuses made up of rolling equity accumulates more as tenure increases.
As for making it to the managing-director level, it takes an average of around eight years from being promoted to vice president, Hopping said. The fastest route is if you’ve helped complete a specific project at one bank that a rival firm now needs to replicate. Despite all the noise made by A.I. and machine learning, around 90 percent of Pinpoint’s tech roles still target people with previous financial services experience.
This article originally appeared in eFinancialCareers.