What salary for year 2
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I see a lot of people state 30 to 40k to start. Now after one year if you are a good performer one would expect commissions to double or triple the salary.
When year two starts what should one expect for salary compensation? $0? 30k? Same as first year?
Obviously if there is a two year contract then the answer is obvioius, but is there two year contracts?
Cheers to LIFE!!!
There are no contracts. This isn’t the NBA.
Your salary would be the same for the second year as in the first, but
if you are producing at the rate they want then your salary is non
existent. Here is what I mean: lets say your salary is
$40,000. If you do $90,000 in production your first year, you are
entitled to 40% of that, which is $36,000. They already paid you
$40,000 so you would get no commission, just your 40k salary and that’s
it. Then lets say your second year you do $120,000 in
production. You are entitled to 40% which is $48,000; they
already paid you 40k so you would make another $8,000 in
commission.
That’s how most wirehouses do it anyway. Others may be different.
Okay that makes sense.. I am in a unique situation where I can draft a predetermined amount out at my decision. Plus I get full commissions on top.
I was unsure if I should go most of the draft ASAP or slow to show commitment!
Thanks for the information!!
[quote=Scorpio]There are no contracts. This isn’t the NBA.
Your salary would be the same for the second year as in the first, but
if you are producing at the rate they want then your salary is non
existent. Here is what I mean: lets say your salary is
$40,000. If you do $90,000 in production your first year, you are
entitled to 40% of that, which is $36,000. They already paid you
$40,000 so you would get no commission, just your 40k salary and that’s
it. Then lets say your second year you do $120,000 in
production. You are entitled to 40% which is $48,000; they
already paid you 40k so you would make another $8,000 in
commission.
That’s how most wirehouses do it anyway. Others may be different.
[/quote]
Scorpio,
Let me get this straight. The salary is merely a guaranteed minimum,
and ONLY if your commissions are above your salary you get them?
I was lead to believe that Morgan Stanley and AGE (the companies I am
in late stages of the interview process with) would pay a salary of
30-40 K PLUS ALL COMMISSIONS MADE.
Was I mislead?
Thanks in advance.
I was under the impression that the commissions are extremly low for a while. I wonder if the theory presented is true? Or does the amount vary from employer to employer?
I think many of us get sucked in thinking our one friend making 150k works for company x. If they can do it I can do it. Then you truly dont understand the compansation structure even after the paperwork is signed!
Any information on commission would be greatly appreciated..
[quote=executivejock]
I was under the impression that the
commissions are extremly low for a while. I wonder if the theory
presented is true? Or does the amount vary from employer to employer?
I think many of us get sucked in thinking our one friend making 150k works for company x. If they can do it I can do it. Then you truly dont understand the compansation structure even after the paperwork is signed!
Any information on commission would be greatly appreciated..
[/quote]Dude are you a total dork or what?
I know that Legg Mason's structure was a guaranteed salary for the first 2 years. It declines over that time each quarter assuming that commissions would be increasing to replace the salary. They pay full commissions to you at a rate of 35% (no paying themselves back first).
The 1st year is around 30k, while the 2nd year is more like 18k by year 3 you have no salary, but they fix your payout @ 35%. Year four you go to grid (comm. % based on production level).
If you hit the firms goals for assets and production - you will starve. You need to keep yourself pegged to a higher standard at least 10mm per annum. assuming a 70% velocity on your assets you could be looking at 50k + income the first two years. If you have a few elephants to hunt, some qualified plan business, or some sh!t luck, then the sky is the limit!
My feeling is that with additional compression of margins, a broker is going to need 200mm in AUM to make a decent living so plan accordingly!
Best of luck!! Put Trader will be along shortly to examine your credentials.
[quote=Put Trader]
[quote=LMBARGINCHIP]
My feeling is that with additional compression
of margins, a broker is going to need 200mm in AUM to make a decent
living so plan accordingly!
Best of luck!! Put Trader will be along shortly to examine your credentials.
[/quote]The compensation for rookies has gotten much better that it was years ago.
I signed on for $600 per month OR my commissions whichever was
greater. The catch was if you took commission you reverted to $0
or commissiions whatever was greater.
I took my test in September. In October my commissions totaled
less than $600 so I took the $600. Ditto for November.
There was a coffee shop on the first floor of our building and every
day I would stop there. So did an older guy–actually he was not
older, he was old. We would exchange pleasantries, talk about the
weather and so forth.
After a few such exchanges he asked what I did and I told him I was a
"Baby Broker" with Acme, up on the 23rd floor. I handed him my
card–always present in the breast pocket of my suits–which he glanced
at and dropped into his shirt pocket. I wore suits he wore shirt
sleeves–a fact that I did not fail to notice.
In very late December–between Christmas and New Years–he was in a
coat of some sort and I was in a Burberry overcoat. As we walked
to the elevator he said, "My broker is not in town and I need to make a
trade or two–would you like to handle it for me?"
Would I like to handle it? Do big bears schidt in the woods???
I told him I’d come to his office and he said, not to bother he needed to get his act together and he’d call me.
He got off at 15 and I went on up–giddy almost at my good
fortune. I had no idea what was going to happen but I knew I had
opened another account at the end of the year and that’s what mattered
most.
Well, he was the portfolio manager of a small insurance company.
He moved enough securities that day–selling for tax losses that I
earned more on his trades than I would earn in a year at $600 per month.
It was crisis time. Should I take the year in advance type payment, or stay on the safety net of the salary.
I took the commish.
It was six or eight months before I actually got a paycheck for more than I would have gotten on that damn $600 per month deal.
Ah, but you’re saying, "Surely Putnam was smart with his money so he stretched that lump sume…"
Nope. We bought a Microwave for $3,500–and wasted the rest.
[/quote]
An amusing story and refreshingly honest, my worthy antagonist…
I think he wasted his money on hookers. That’s why he’s so afraid of getting the clap.
JOED you have no idea who I am so if you want to make a negative comment at my 2AM post cheers to you.
[quote=executivejock]JOED you have no idea who I am so if you want to make a negative comment at my 2AM post cheers to you. [/quote]
Let's see....executive jock, executive jock....I know! Executives put you on when they play raquetball. Am I right?
[quote=executivejock]JOED you have no idea who I am so if you want to
make a negative comment at my 2AM post cheers to you. [/quote]
don’t be so uptight kid…I’m just havin’ some fun wit’ ya. If
your skin is that thin, you’ll have a tough time in this biz…
I know I am just sending one back to you… Have fun and cheers to life and success…
Executivejock… great name, huh…
[quote=annuity guy]
[quote=executivejock]JOED you have no idea who
I am so if you want to make a negative comment at my 2AM post cheers to
you. [/quote]
Let's see....executive jock, executive jock....I know! Executives put you on when they play raquetball. Am I right?
[/quote]Mojo (annuciated smiling with teeth tightly clinched and jutted chin):
"I simply feel dashing today in my new executive jock. Squash, anyone?"