Everyone is getting paid these days — except investment bankers
Finally Friday! Dan DeFrancesco in NYC.
Fun Fact Friday: Blood Falls is a waterfall in Antarctica that gets its name from its vibrant red water. Here's what causes its unique color.
Today, we've got stories on a first look at the actors in the upcoming GameStop movie, a visual representation of how tough the housing market is, and why the future of flight delays might not be so bad.
But first, I think it's time for a raise.
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1. How much do you get paid?
Can you solve this riddle?
I work long hours and get mediocre pay compared to those in my field.
The regulators don't let me take any risks.
My peers make crazy bets on startups and AI.
But I can't even take the private plane for a little ride.
And now I hear the lawyers are getting paid higher fees?
Surely this is some kind of sick joke being played on me.
Who am I?
It's been a tough go for investment bankers recently.
The M&A and IPO markets have been at a near standstill for the past year. The lack of dealmaking and companies going public means no fees, which means weak bonuses.
As if all that wasn't bad enough for bankers, The Wall Street Journal recently reported that even lawyers are now making more money than them.
The story highlighted one recent high-profile move — dealmaker Robert Kindler's departure from Morgan Stanley to the law firm Paul Weiss — as evidence of the trend.
There are several factors affecting the rise in lawyer pay, as outlined in the story, but perhaps more interesting is how compensation for bankers hasn't risen.
It turns out the culprit, as is often the case on Wall Street, is inflation.
Investment banking fees have been largely unchanged over the years, per the WSJ, which is why the average total comp for a non-high-ranking managing director is usually between $1 million to $2 million. That figure has largely remained the same over the past 20 years.
Lawyers, meanwhile, have been more cognizant than bankers of the fact that the price of things tends to go up. Most large law firms increase their rates by about 4% annually, according to the WSJ. As a result, equity partners at big firms can now make $3 million a year.
It's getting really tough these days to make the case for getting into investment banking. The hours are long. The work can be boring. And it seems like everyone — from hedge funders to private-equity dealmakers — is making more money than bankers.
Sure, there is a certain cachet that comes with working at a large investment bank, as those junior positions can serve as a springboard for your career. And if you choose to remain at the bank and to rise to the top, you can hold the type of power most people on Wall Street can only dream of.
But non-banks are getting smarter about recruiting talent right out of college, and there are only so many C-level positions at big banks to go around.
That begs the question: Why bother getting into investment banking at all?
In other news:
Sony
2. Meet the cast of the upcoming GameStop movie "Dumb Money." Seth Rogen, Nick Offerman, and Paul Dano are among the stars cast to play key figures in the upcoming film based on the GameStop short-squeeze of 2021. Check out screenshots from the film, and how they compare with their real-life counterparts. And here's how I would have cast the movie.
3. Steve Cohen is all-in on using ecstasy for treating PTSD. The billionaire investor and his wife, Alexandra, donated $5 million to a nonprofit pushing to legalize the usage of MDMA for treatment, per Bloomberg. More on why the Cohens are backing psychedelic projects.
4. Seven charts explaining the dumpster fire that is the housing market. Harvard researchers released a report detailing why it's such a bad time to buy a home. Here are a handful of charts that demonstrate why that's the case.
5. First Republic bankers keep heading for the exits. Roughly 50 wealth advisors and staff from the bankrupt firm have already departed JPMorgan, which acquired First Republic less than two months ago, according to Semafor.
6. The economist guiding the parents of the upper middle class. Emily Oster has grown to be one of the most powerful, and at times controversial, health experts in the US. More on her rise.
7. David Solomon is losing the clubhouse. The Goldman Sachs CEO's future is reportedly in doubt as the bank's board loses confidence in him, according to The Messenger. A spokesperson for the bank, meanwhile, told The Messenger that Solomon and the leadership team "are focused on delivering for clients and executing on our strategy. The same tired stories from the same tired sources aren't going to change that." Read the full story here.
8. The latest ranking of the world's most liveable cities doesn't have any from the US in the top 10. Not a great showing from the US in the Economist Intelligence Unit's annual ranking. More on the list here.
9. This could be the future of flight delays. United has a plan for how to handle passengers facing flight delays. Here's how you could get instant gratification when you're stuck at the airport.
10. Some tips if you're going to start on the Mediterranean diet. Consistently considered one of the healthiest ways to eat, the Mediterranean diet relies on vegetables, legumes, seafood, and olive oil. Check out tips from a dietitian on some go-to snacks.
Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Nathan Rennolds (tweet @ncrennolds) in London.
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