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Answering Your Questions
The Wall Street Skinny
September 05, 2025
This Week on The Floor
Quick update:
This Fall, we’re launching a new series of high-impact, live virtual trainings designed to give professionals at every level the skills and insights to thrive on Wall Street.
Whether you’re onboarding new hires or giving non-investment professionals the tools to understand the business, our bootcamps provide real-world, practical knowledge delivered in an engaging live format that participants can join from anywhere.
Perfect for investment banks, asset managers, hedge funds, private equity, wealth managers, and RIAs, these programs help teams bridge knowledge gaps, sharpen technical skills, and see the bigger picture of global markets.
Upcoming Programs:
📊 2-Day Financial Modeling Bootcamp
October 27–28 | 10am - 4pm EST
Master the technical Excel and accounting skills essential for investment banking, private equity, and fundamental investing.
🌍 Global Markets & Investing Playbook
October 6 | 10am - 4pm EST
A one-day crash course on the financial ecosystem, perfect for anyone seeking a big-picture understanding of how global markets and Wall Street fit together.
👉 Reserve spots for your team today and empower them with the skills to succeed.
We’re answering your questions from social media!
“I didn’t get the return offer from my summer internship”…now what?
“How are Sales & Trading bonuses determined?”
“How Are Sales & Trading Bonuses Determined?”
Sales & Trading bonuses (and really, all bonuses at Investment Banks) are more art than science.
The high level way to think of it is that there is a giant pool of money that comes in at the firm level. The attribution for that money then gets subdivided by division. Within the Investment Bank, how much of that money came from corporate advisory, aka deal fees? How much came from debt and equity origination? And how much came from market making activities and risk facilitation in the Sales & Trading division?
Now, it doesn’t just get doled out from there. There is SOME socialization of PNL across those three divisions depending on the year. Think about it: if IBD had a disastrous year and S&T hit it out of the park, you don’t want to give all your top M&A bankers a donut, because they’ll resign. But the head of each division will be lobbying to keep as much of that PNL for his/her division’s bonus pool as possible.
Then within that giant S&T bonus pool, there is a desk-by-desk attribution. But that doesn’t become a hard dollar payout like a commission would. Instead, your bonus pool is typically determined by your desk’s performance RELATIVE TO your budget. Meaning, if your desk’s budget was $100mm, and your year end PNL was $150mm, you are likely to get paid up relative to last year.
How MUCH you get paid up is another question. Everything tends to be benchmarked off the prior year. Instead of a fixed percentage of the total PNL, it’s typically some percentage increase (or decrease) relative to your pay the prior year. And the truth is, your beta to performance is much lower than on the buy side.
In an amazing year, your percentage move to the upside is typically capped, unless you’re a superstar that the firm is desperate to keep. But that ALSO means your downside tends to be limited. While the floor truly is zero in a terrible year, fear not: “donuts”, as they are affectionately called, are also rare. Why? Well, for the same reasons I mentioned earlier. If you get zero bonus, you are likely talking to headhunters the very next day. Banks have invested considerable time, energy, and resources into training and developing their talent. Unless they truly want you gone, or there’s been an utter catastrophe, you’re unlikely to get paid zero bonus for one meh year.
Moreover, analysts and associates are typically paid within very tight, fixed ranges, and tend to have less variability both to the upside and downside. That money has to come from somewhere. So to solve for this, just like PNL is socialized to some extent across divisions, desks that had a banner year ultimately end up subsidizing other desks that had crummy years. So just when you thought you crushed it as a credit trader, you’ll find out that the options desk blew up, and your pay is only up 10% when you thought it would be up 20%.
There’s also risk at the headline level. When banks run afoul of regulators, have to pay huge fines in any given year, or have a stock price that performs terribly, that typically also translates into reduced payouts. Remember, most bank bonuses beyond the analyst & associate level are some combination of cash upfront, deferred cash, and deferred stock on different vesting schedules. So your deferrals that have been accumulating in stock may fluctuate in value dramatically before you have the chance to decide what you want to do with that money.
Sales & Trading bonuses can be amazing, especially at senior levels (we have friends running desks who make high 7 figures, some low 8’s), but they are still nowhere near what they used to be in the glory days of prop trading, when legends like John Hoffman at Lehman regularly saw 8 figure payouts. Even most bank CEOs make a fraction of what they used to pre-crisis. That is why the past decade or two has seen more a shift within the Sales & Trading side of the bank from young people looking increasingly towards exit opportunities, with an eye towards greater asymmetric compensation upside potential.
“I didn’t get the return offer this summer…”
How do you pick up the pieces after a disappointing summer and navigate full time recruiting?
This was the most commonly asked question we got on social media last week. Some of you had a great summer experience with all positive feedback, and were flabbergasted when the full time offer didn’t materialize. Others had terrible summers, and were left more confused than ever about their future job prospects. Sharing our personal advice on how to bounce back strong into your senior year here.
First of all, we get it. I (Jen) didn’t really get the return offer after my Junior summer. It was “I guess we could find you a spot on another desk in a satellite office….”. Thanks, but no thanks. My ego was bruised, but I wasn’t surprised. And after I nursed my wounded pride, I felt relieved. I hadn’t actually LIKED any of the desks I’d worked on for various reasons. So I decided to take that learning experience and formulate a very clear strategy with the following steps:
1) Figure out what went wrong.
Do an unflinching post mortem on your internship. What went wrong for me? Well, I personally was terrible when given a vague, long term project without key metrics for success. I was unsuccessful in using my conversations with key people to build relationships; instead, I’d made a negative impression by limiting the scope of those conversations to the immediate task at hand. And I wasn’t given (nor did I proactively identify) great mentors at the firm. So now I had a key list of things to solve for in my next role.
2) Identify what you actually DID like about the experience.
If you still want to be in the industry, why? I knew I wanted to be in a fast paced environment. Where I floundered over the summer was rotating through desks with nothing going on. I identified that I liked to be in a seat where I had constant stimuli to react to, that was tied to the markets, and where I could make a measurable impact day one. So I narrowed my full time search and tailored all my conversations to that precise set of qualifications. I loved interest rates specifically, and wanted to be on a desk where analysts were given client facing responsibility early. I told every firm I interviewed with that I was keen on a very specific set of roles where I could add measurable value from day one, not be deployed strategically in some circumstances, dead weight in others.
3) Level up you technicals.
You have to prove what you DID learn. After my summer, I had no excuse anymore for not knowing the basic technical skills. Armed with my newly minted understanding of the industry and the products, I supplemented with nonstop reading before full time interviews started. I literally read Fabozzi’s Handbook of Fixed Income Securities cover to cover. I turned every conversation into a more focused, elevated, specific dialogue about the markets, various trades, how the client landscape was shifting, etc. I went from speaking like an internship candidate to speaking not as a full time job candidate, but like someone who’d been ON THE JOB. The technical expectations are much higher for someone with internship experience, even if your experience wasn’t directly in the line of business you’re interviewing for.
4) Become a networking machine.
Everyone you met over the summer is now part of your network. Not just the people at the firm, but your fellow summer analysts, and their friends that you met at parties, and their friends that you met at networking events. Those relationships may yield greater returns than your networking further up the chain of seniority, because a friend of a friend may just be the one who turned down THEIR return offer, opening up a seat for you.
5) Frame the story the right way.
You didn’t get rejected because you were incompetent, or boring, or awkward…you mutually parted ways on great terms with an institution that wasn’t the perfect fit for this specific chapter in your life for a set of totally unobjectionable reasons. Never speak badly about your experience, and only share mistakes in the capacity of what you learned. Tell the truth, but always with a positive spin.
Listen, you’re not alone. All these firms are limited by headcount and budget, and they are notorious for overhiring and overfiring. A missed return offer is just one chapter in the story, and can more often than not be a blessing in disguise. No senior thought leader we’ve ever met had a perfectly linear career path. And rejection is only a failure if you don’t learn from it. In the end, I ended up finishing out my career on the very same trading floor where I didn’t get my Summer Analyst return offer! As a rising senior, I couldn’t have imagined that in my wildest dreams.
So hang in there. It will all work out in the end. And good luck!