London Business School (LBS) has just released its new employment report for graduates of its MBA class of 2012. Plenty of LBS MBAs are still getting jobs in financial services. However, something strange is happening to their compensation. While average pay for MBAs in finance is stagnating, pay at the lower end has fallen and pay at the top end has increased dramatically.
As reported last week, MBA students joining the finance industry tend to earn the most at private equity firms. LBS doesn’t break out pay for different kinds of finance firms – it simply offers a single ‘finance’ category. For 2012, pay for LBS’s finance MBAs was as follows:
London Business School: Pay for MBAs in finance, 2012 (£ and $)
This compares to the following chart for LBS’s MBA class last year:
London Business School: Pay for MBAs in finance, 2011 (£)
LBS’s figures show that mean pay for first year MBAs in finance has stayed fairly steady (£137k in 2012 vs. £139k in 2011). Year-end bonuses have fallen while salaries and sign on bonuses have increased. Notably, the lowest paid MBAs in finance are earning less (£53k vs. £59k last year). But the best paid MBAs in finance are earning a lot more (£281k vs. £404K) in total.
London Business School didn’t return a request for comment. Sarah Jouillet, director of postgraduate careers at Cass Business School said more MBAs are going into risk and middle office roles this year, which could be reducing bonuses. The average salary for an MBA in an investment bank is anything from £70k-£100k, said Jouillet. A £400k package would be, “very high.”
Logan Naidu, CEO of recruitment firm Dartmouth Partners, says that bonuses for the associate roles filled by MBAs in investment banks will be down around 20% this year. Like Jouillet, he says a first year package of £400k in an investment bank would be unheard of. “That probably applies to one person in a hedge fund or private equity fund,” he suggests.