Read on Twitter
1/10 - A thread on banking comp and budgets... (Ignore if not sell-side)
It's that time of year again. Everyone is obsessed with the former... and annoyed by the latter. That is a big mistake...
It's that time of year again. Everyone is obsessed with the former... and annoyed by the latter. That is a big mistake...
2/10 - On comp, you are not actually paid on 2020 production. You are paid on your ability to REPEAT those numbers in 2021. (And your assumed bid away, which is a topic for another thread)
3/10 - Let's say that again because it is critical. You are paid on your ability to REPEAT 2020 numbers. There is no better way to signal this ability... than in your budget for next year.
4/10 - Budget yourself up at least 30% higher than the 2020 bonus pool. NEVER BUDGET FLAT or DOWN. If you don't believe you can find a way to crush it... why should your boss pay you?
5/10 - Defend your numbers with granularity. Most people just say... "I made 20, next year 30." Break it down by line item and by client. New issue credit, flow, client A, new client acquisition... how many trades can you restructure? how many times?
6/10 - If you miss... Granularity is important because you can explain why. There was no new issue, client X wallet dropped, etc.
7/10 - If you crush it... it won't look random. It will look like you executed a business plan and hit your targets.
8/10 - Go Big... Chances are high that your boss is weak and trying to budget flat / +5%. Make your personal number SO HIGH that it blows up the system and he/she needs to cut you back. FIGHT THE CUTBACK.
9/10 Hit your number... Hitting your number would be great... but eventually you will miss. Use the granular plan to provide quarterly updates on your progress.
10/10 One more time... you are not paid on your 2020 production. You are paid on your ability to REPEAT the number. A budget explains how you did what you did... and how you will do it again... and again... and again. Good luck! (Nxt topic: Getting the number, other suggestions?)
