Investment Banking Salaries in Canada 2024

Are you wondering whether investment bankers are paid well in Canada? An analyst earns an average base salary of CAD $86,764 per year in Toronto, ON. With additional pay, like bonuses, the total average pay can rise to $140,397.

However, your compensation as an investment banker in Canada can be higher or lower than the average amount due to various factors. Keep reading to know the causes of salary variations, top paying banks, IB pay structure, and salary progression with experience. We'll also explore how the investment banking compensation in Canada compares to other lucrative professions in the country.

How Is the Salary Structured in Investment Banking?

The compensation package of an investment banker typically consists of a base salary, bonuses, and additional benefits. Here's a breakdown of what you can expect.

• Base salary: This is the fixed income a banker receives regularly, regardless of performance. The base salaries vary by experience and seniority in all firms. In Canada, entry level analysts get a total average of $140k annually, while managing directors make $800k or more.
• End-of-year bonus: After assessing a full-year performance, investment banking firms award bonuses to their bankers early in the following year. Every rank typically has a fixed percentage, often ranging from 20% to more than 100% of base pay. However, the percentage is subject to change based on the state of the economy and the bank's annual performance.
• Stub bonus: Investment bankers who are straight from university or MBA programs often begin working mid-year. As such, the banks give them a "stub bonus," which is a percentage or portion of the end-of-year bonus.
• Signing bonus: This is a sum of money that investment banks offer qualified and experienced bankers as an incentive to accept the job offer. The amounts, structures, and conditions vary by company.
• Performance bonus: Besides the end-year bonuses, investment bankers can receive other performance-based awards attached to specific deals throughout the year.
• Additional perks: Just like other professions, IB bankers get benefits such as health and insurance plans as part of the compensation packages. 
  
   

Which Factors Influence Your Salary in Investment Banking?

Ready to discover the reasons why you might earn higher or lower than the national average? Below are the top factors that influence your compensation in investment banking.

Level of Experience and Position

Base salaries and bonus percentages increase as you rise in the investment banking ranks. A managing director is typically the highest paid while the entry level analysts earn significantly less than all other positions. In terms of experience, a third year analyst out earns a first and second year investment banker. So, every year of experience even at the same position can lead to an increase in compensation.

The Firm You Work For

You might earn higher or lower than your peers, with the same experience and qualifications, depending on the institution you're working for. Elite boutiques and multinational bulge bracket firms like Goldman Sachs, JPMorgan Chase, and Morgan Stanley offer the highest and most competitive pay packages. That's often because they are able to get a big market share and generate impressive revenues.

On the other hand, regional investment banking firms offer lower salary and bonuses as their market share and deal flow is often smaller. A managing director in such a small company might earn at the same level as a vice president in a larger bank.

The Specific Group and Industry Focus

Some industries that investment banks focus on lead to a steady deal flow and more revenue than others. The result is better compensation for bankers working on such deals. These include healthcare, technology, energy, and industrials that focus on specific high-growth sectors.

Also, some investment banking groups are more prestigious and high paying than others, including M&A, LevFin, equity capital markets, and restructuring. The prestige and strength of each group can vary by firm.

Job Location

Generally, location is a huge determinant of investment banking salaries. IB bankers in the US earn slightly higher than their peers in Canada due to the overall size of the market.

Within a country, the major cities with a high concentration of investment banks offer the highest compensation to compete for the top talent. Toronto is the primary financial hub in Canada offering the highest salaries than other cities.

Performance and Economic Conditions

While all investment bankers receive a bonus, top performers can get bonuses that exceed the base pay. That's often true in the top three senior positions of vice president, director, and managing director.

Bonuses are tied to the performance of an individual, team, and the firm. And the performance is hugely determined by the size of the investment banking industry in a region and economic conditions. On a good year, bonuses can go higher while declines are expected in tough economic times.

Negotiation Skills

If you have an MBA, certifications, or proven experience in investment banking, you can negotiate higher pay if what you're offered doesn't match expectations. Research the industry benchmarks for your qualifications and demonstrate your value to get competitive packages. Junior investment bankers with little to no experience might not have a base for negotiations.

What Are the Top Paying Investment Banking Firms in Canada?

Highest-Paying Investment Banks: Bulge Brackets & Canada’s Big Six Banks

The majority of Canada's leading banks offer decent base salaries starting above $75K. The Bank of America seems to offer the highest base pay for the most experienced analysts at $176K.

Meanwhile, Goldman Sachs provides the most generous potential bonus at $100K, while Wells Fargo has the lowest at $31K.

In terms of total compensation packages, JP Morgan Chase is at the lower end with $103K, and Bank of America tops with $183K. Notably, Canada's "Big Six" banks (RBC, BMO, TD, Scotiabank, CIBC, and National Bank) compete well with international institutions, often matching or exceeding their compensation offers.

National Bank is the top paying Canadian investment banking firm when considering the total pay, coming in at $171K. Overall, Bank of America, Morgan Stanley, and National Bank offer the top-tier compensation packages among the most prominent investment banks in Canada.

Top Paying Elite Boutiques & Canada-Specific Investment Banking Boutiques

In the elite boutiques and Canada-specific investment banking firms category, compensation packages vary significantly.

The first variation is in how they arrange bonuses. Stifel, for example, offers a large bonus range in comparison to its base pay.

Next is the overall pay. The total salary ranges from Macquarie's modest $100K to Evercore's impressive $208K. Canadian boutiques such as Canaccord and Desjardins are quite competitive, offering total compensations of $148K and $165K respectively. So, they're on pace with some international firms.

Despite Macquarie's outlier status at the lower end of the pay scale, the overall salary data suggests that boutique investment banks in Canada offer attractive compensation packages. Some, like Evercore and Lazard, may even outpay larger institutions in total remuneration.

How Do Investment Banking Salaries Progress with Experience?

As expected, investment banking salaries increase as you gain experience and climb the career ladder. You can earn between $140K and $200K per year if you start as an IB analyst.

Moving up to an associate role, the total pay jumps to a range of $200K to $400K annually. First year associates typically earn the lower amount while experienced associates in second or third years make more.

The next step up is vice president, where total salaries range from $400K to $600K annually. This is more than double what an analyst might earn, showing how valuable experience and ranks are in the investment banking industry.

Senior vice presidents follow with pay ranges of $600K and $800K. At the top of the investment banking ladder, managing directors can earn over $800,000 per year.

Investment Banking Salaries in Comparison to Other Industries

Is investment banking still lucrative when compared to some of the highest paid careers in Canada? Well, entry level analysts get a decent average base salary of $76K to $99K. This range exceeds that of financial analysts ($54K - $74K) and mechanical engineers ($57K - $85K).

However, some tech roles like software engineers ($74K - $117K) and IT managers ($79K - $114K) have the potential for higher earnings, particularly at the upper end of their ranges. Data scientists also pace on well, at $78K - $111K, slightly outpacing investment banking analysts at the top end.

Consultants, who are often viewed as close competitors to investment bankers, offer a comparable but slightly lower base salary at $63K - $97K. Then the sales and marketing field provides the widest salary range ($41K - $107K) due to the variation in roles and performance-based compensation structures.

So, while investment banking is a lucrative career choice, tech-related professions are competitive in terms of base salary offerings in the Canadian job market.

Key Takeaways

• Investment banking salaries in Canada typically consist of a base pay and bonuses. Entry-level analysts earn a base salary range of CAD $74K - $99K and additional compensation of $29K - $91K.
• Some of the factors that differentiate between the least and highest paid investment bankers include job location, experience level, rank, firm, performance, group, industry focus, economic conditions, and negotiation skills.
• Investment banking is one of the most lucrative careers in Canada with analysts earning comparable base salaries to consultants and sales professionals. Data scientists, software engineers, and IT managers may slightly outearn entry level IB analysts.
• Investment banking salaries increase substantially with experience and promotions. Starting from $140K-$200K for analysts, total compensation rises to $200K-$400K for associates, and over $800K for managing directors.
• Elite boutique firms in Canada offer competitive pay packages, with some like Evercore and Lazard out paying the “Big Six” and bulge bracket banks.
• Canada's "Big Six" banks compete well with the multinational bulge bracket firms by matching or exceeding their compensation packages. National Bank seems to top the domestic firms in terms of the total pay, with an average of $171K.