Chad from Murray Hill works hard for the money, he works hard for the money, so you better treat him right. Or maybe just pay him right.
That’s certainly the case at Citadel and Citadel Securities, where summer interns are reportedly making about $120 an hour this year, a 25% jump from intern pay last year, Bloomberg’s Paulina Cachero reported. That translates to $19,200 a month pre-tax for the typical 40-hour workweek and more than four times what the typical U.S. worker makes a month—$4,400. While these interns will only see that kind of paycheck for the summer months, it’s equivalent to a $230,400 annual salary.
Citadel certainly has the means to pull out the red carpet for its eager-eyed interns considering its record-breaking year. It raked in $16 billion in profits for its clients in 2022, beating the rest of the hedge fund industry. For context, that surpasses the $15 billion John Paulson generated betting against subprime mortgages in 2007. All together, the top 20 hedge funds generated $22.4 billion in post-fee profits, Citadel included. CEO Ken Griffin told Fortune’s own CEO Alan Murray that a full-time return to office was the reason behind Citadel’s achievements.
Aspiring financiers want in. Citadel received a 65% increase in applications for its internship program, a spokesperson told Cachero. Its success has given the company a leg up in offering some of the highest intern pay in the industry, edging out competitors for top Gen Z talent.
Griffin has always believed in hustling early on in your career. “If you don’t spend your 20s creating a solid foundation for your career, it’s going to be very hard to do it when you’re in your 30s and 40s,” he told last year’s graduating class of interns, as reported by Business Insider.
Wall Street wants Gen Z
Citadel is leading the way in Wall Street’s attempt to pander and appeal to Gen Z in light of cut bonuses and layoffs. Median intern pay surged by 19% at the top 16 finance firms, per Levels.fyi data. Investment banking summer interns at Barclays and Bank of America are earning an annualized rate of $110,000 at both places, Cachero wrote. While that sum is nothing to laugh about, the fact that the intern pay at banks is half what Citadel interns are making is emblematic of the hedge fund’s growth.
Wall Street’s strategy to appeal to Gen Z with pay makes sense, given that the generation has vocally pushed for fair pay in a time of high inflation and mounting student loan debt. A majority (70%) of Gen Zers say compensation as the top factor in staying at a job, finds a survey from online recruiting platform Handshake. They also want flexibility, but early data shows they’re more willing to go into the office than other generations in an attempt to advance their careers or network—a good thing for those who want to work in finance, considering that most Wall Street execs have called workers back to the office by now. But Gen Z is also about work-life balance, something that the financial sector is infamous for ignoring. Perhaps Citadel’s high pay would make up for that int heir eyes.
However, the overall hike in intern pay across the entire finance industry might be a bit unexpected considering that things weren’t looking too bright in the sector last year. Many bankers, from those at JPMorgan to CitiGroup, saw their end-of-year bonuses cut by as much as 30% after firms lost investment banking revenue following a boom in 2021. One year after giving out the largest bonus on Wall Street, Goldman Sachs reportedly weighed the idea of cutting banker bonuses by 40%, marking the potential largest cut to pay since the financial crisis in 2008.
Last summer, Mike Mayo, bank analyst at Wells Fargo, warned entry-level employees of a downturn, saying “don’t spend the 2022 expected bonus on a new beach house. It might be a lot less than it was in the past. And you might not get it at all.” He continued, “And there’s a chance for some, you won’t have a job.”
It seems that the picture is prettier than anticipated for some interns, while some more senior bankers are worried about their jobs on the line—even though they’re still paid way more than those below them.