What is typically the key factor determining investment banker bonuses?

The key factor determining investment banker bonuses is typically the success of the deals they work on. Bonuses in investment banking are heavily performance-driven, meaning that when bankers successfully close lucrative deals, such as mergers and acquisitions or initial public offerings (IPOs), their bonuses are likely to be significantly higher. This performance-oriented structure is designed to incentivize bankers to deliver results that not only benefit their clients but also enhance the firm’s overall profitability.

Success can be measured in various ways, including the size and profitability of the deals closed, the revenue generated for the firm, and the overall contribution to the firm’s bottom line. This focus on deal success aligns the interests of the bankers with those of their clients and the firm, fostering a competitive and results-driven environment.

While factors such as the firm's size, the individual’s salary, and the number of clients served may play roles in overall compensation structures, they are generally secondary to deal performance when it comes to determining bonuses. This strong emphasis on deal success reinforces the high-stakes nature of the investment banking industry, where outcomes can lead to significant financial rewards.