The real motivations behind moving from investment banking to corporate roles
Ben Gorell, a member of River Partnership’s corporate development and strategy team
Our recent report, The Transition from Investment Banking to Corporate, takes a look at the motivations and post transition insights of professionals who have made the switch and compares the pros and cons of working in the two sectors.
In the world of investment banking, it is easy to assume that money counts. So, when professionals decide to transition out of the field it is more often than not for reasons other than financial remuneration.
Fundamental motivations behind the desire to transition out of an investment banking role into a corporate environment fall broadly into two categories.
While there is clearly a gulf in the hours of a typical working week between investment bankers and those in corporate roles, a subtler – but perhaps more important – distinction is the actual manageability of their hours and schedules.
Investment bankers do not individually control their schedules or hours worked and are expected to be available evenings, nights and weekends in pursuit of maximising revenues for the firm. Obviously, remuneration is commensurate with the drive and work ethic of the investment banker, but this can come at a cost to family and down time.
Corporate roles generally pay less in terms of overall compensation, with the disparity evident in the bonus, rather than the base salary. The blow of a pay cut can be softened through options such as Long-term Incentive Plans (LTIPs), Restricted Stock Units (RSUs) and other equity packages, but some professionals choose to rationalise it by viewing their new pay in terms of pay per hour. By this measure they are certainly earning more and gaining the valuable commodity of time. Alongside their more flexible corporate working hours and allowance for time spent outside work, they are also afforded greater control of their schedule, resulting in a far more evened out work-life balance.
With an ever-increasing number of professionals with less than five years investment banking experience transitioning to start-ups or TMT firms that generally compensate staff in less traditional methods such as RSUs, it will be interesting to observe if this indeed becomes a growing trend and bankers forgo their traditional base and bonus structures.
Interesting and meaningful work
Working in a corporate role provides greater insight into the company, its underlying values and its business model. Candidates who have fully understood the business model of the firm and the deal pipeline have been the most satisfied in their new roles. Another highly appreciated aspect is the opportunity to work closely with internal CFOs and CEOs.
The quality and type of work in corporate role is regarded as stimulating and meaningful, with the more measured pace in the corporate environment also enabling the development of skillsets such as stakeholder engagement and communication skills. With the natural pathway into a corporate role being to join a former client or sector of particular interest, this may go some way to explaining the greater level of satisfaction as the roles prove to be both interesting and challenging.
For more information on the experiences of professionals making this move, read our latest white paper, The Transition from Investment Banking to Corporate, where we survey 100 professionals who have transitioned from large and top tier investment banks to ask about their experiences
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