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Pay for junior and mid-ranking bankers is rising. But is it increasing as fast as pay for managing directors?

Anyone who suspects their hard work is going to support an elite cadre of senior bankers won't have been cheered by last week's revelation in Financial News that Goldman Sachs' partners are now paid salaries of $600k (307k). The paper says this is three times what managing directors at Goldman are paid, and our own reckonings suggest it's more than five times what first-year associates at the firm are getting.

On the whole, however, associate-level staff have done well out of the recent banking boom. "Bonuses for associate ones [first-year associates] are now anywhere between 100% and 250%," says Logan Naidu at recruitment firm Cornell Partnership. "A few years ago, 125% was the top end."

If anyone's lost out, it may well be directors and vice presidents, who've seen managing directors' pay soar and the differential between their earnings and those of analysts and associates eroded slightly. "There's been some eyebrow raising among vice presidents and directors when they see what juniors are getting now compared to what they got a few years ago," says Andrew Lynch, a consultant at Akamai Financial Markets.

As a result, banks like Merrill Lynch have reputedly increased base salaries to 90k, compared to an industry average of around 80k. "Other houses are now having to catch up a bit," says one headhunter.

Bonuses as a percentage of salary - 2007 average ranges

Associate one: base salary: 58k, bonus: 100% to 225%

Associate two: base salary: 65k, bonus: 120% to 250%

Associate three: base salary: 70k, bonus: 175% to 320%

Source: Cornell Partnership

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