It's getting harder to make big money in banking: the harder you work, the more money banks pay to their shareholders. Just look at Goldman Sachs, where the compensation ratio for the second quarter of 2018 fell to a historic low, as the firm devoted just 37% of its revenues to compensation.
In the circumstances, you might want to move somewhere where you get to eat more of your kill. If you work in M&A, there's always Evercore, where bankers take home 60% of the firm's revenues and earn an average of $600k each. Alternatively, there's the strategy consulting firm Bain & Co. There, you'll earn less, but a huge proportion of the revenues you bring in could be yours to keep.
Accounts recently filed by Bain & Co. Inc United Kingdom for the year ending December 2017 show that Bain's UK entity earned £149m ($195m) in revenues last year, up from £139m in 2016. In 2016, 77% of Bain's UK revenues went to paying its UK staff. Last year, 80% did.
The high compensation ratio reflects the fact that Bain & Co. is a privately owned company without any public shareholders to keep happy. It's also reflective of the low capital intensity of consulting businesses - with no public shareholders and limited capital invested in the business, employees are the main beneficiaries when the the company makes money. Bain & Co. isn't alone in its generosity - at Boston Consulting Group, 60% of turnover went on staff costs last year and a further 32% (the profits) was redistributed between partners, with the result that BCG employees and partners combined received 92% of the takings.
At BCG, the average of the firm's 700 UK-based employees earned £101k in the year to March 2017 and the average partner got £1.1m. Bain & Co. didn't break out its UK headcount in its report, but the company employs over 8,000 people in 36 countries globally, around 800 of whom are listed on LinkedIn as working in the UK. Presuming that Bain & Co. UK employs around 1,200 people, the implication is that the company spends an average of around £100k per head each year on compensation.
This is a lot less than the average investment bank (eg. Goldman Sachs International paid an average of £399k for 2017), but it does at least come with one consolation: that you're primarily for yourself. - Unless of course, you're junior and the firm's senior staff take most of the money set aside for pay for themselves, which is a distinct possibility.
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