How much will you earn in combined salary and bonus if you go to work for Lazard? According to last week's results for 2020, compensation at Lazard averages $500k per head.
Lazard employed 3,100 people last year, up from 3,000 people in 2019. It spent $1.6bn paying them, of which $455m went on paying base salaries, and $435m went on paying 'cash incentive compensation' (AKA cash bonuses).
Despite this generosity, average pay per head at Lazard fell 4% in 2020. However, it would have been far worse were it not for the uptick in M&A revenues and activity in the fourth quarter. - Compensation spending was down 10% year-on-year in the nine months to October and only increased as conditions improved towards year-end. As 2020 came-good, there was an 11% year-on-year increase in Lazard's annual cash bonus pool.
Speaking to investors last week, Lazard CFO Evan Russo confirmed that spending on variable compensation (bonuses) rose in the fourth quarter. Chairman and CEO Kenneth Jacobs said the bank added 12 managing directors in 2020. Lazard plans to keep hiring in 2021, said Jacobs, adding that the firm has identified capital raising for smaller firms in the asset management industry as a potential growth area.
However, Jacobs stressed, too, that Lazard likes to nurture talent internally: 10 of the firm's recently promoted managing directors in financial advisory joined the firm as analysts or associates.
The firm effectively runs a "portfolio" of M&A bankers with different levels of productivity, said Jacobs. "At any point in time, you have got existing long-standing bankers... who are very, very productive," but you also have, "the incoming class.... that are going to take a little bit of time to reach their full productivity."
$500k is an average figure: analysts at Lazard in the U.S. received $85k average salaries in 2020 according to the U.S. H1B salary database; associates received $150k; VPs received $190k-$225k, with bonuses paid on top.
Lazard also hired a handful of H1B data scientists last year, and paid them salaries of $110k-$150k each.
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