A Day in the Life of an Equity Associate


A recent article on a job recruiting website outlines a day in the life of an equity associate, detailing salary expectations as well as a description of an associate’s role.  First, the compensation.  Starting salaries for associates with undergraduate degrees are around $65-70,000 with bonuses of $25-45,000. For analysts, base pay is $125– $150,000 with total compensation around $300,000, although it can be higher for highly ranked analysts at bulge bracket firms.

Unlike investment banking analysts, equity research has no up-or-out culture, so associates tend to stay at firms longer than their banking brethren.  Total compensation caps out at $200,000 for associates at the high end.

The day in the life is a “mix of maintenance work – updating models, for example – researching companies (mostly by speaking with the buy-side to see what investor sentiment is), and then finding new companies to initiate coverage on.”  The comment about research primarily being gauging sentiment reflects one of the key values of sell side research, which is reflecting current valuations and market views.  However, it glosses over any primary research which a typical associate might be doing.

Not surprisingly, the focus is earnings: “The most important part is to predict the company’s earnings in advance – shortly before they announce, we’ll meet with the management team, survey customers and partners, and do other research to figure out whether they’ll come in at, above, or below the consensus.”  Note the reference to ‘other research’, which is where the channel checks, surveys or other primary research would come in.

Reports are not a big factor for associates: “Equity research is most well-known for the reports we issue, but ironically that’s not what takes up most of my time – each Associate might cover only a few companies and we only issue a few reports each quarter.”

Most research teams cover 8 – 15 companies and the focus is on the largest cap stocks: “When you pick companies to cover, you want names that will drive trading volume. They might be large-cap names that always have lots of trading volume, which is why most bulge bracket banks focus on the biggest companies.”



About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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