mbaMission - Boutique MBA Admissions Consulting » Compensation Report

Compensation Report: Goldman Bonuses Bounce Back

mbaMission — Wed, 15 Jul 2009 16:33:44 +0000

Music to the ears of aspiring MBAs, the days of whopping paychecks are back at Goldman Sachs. Goldman just posted a $3.4B quarterly profit and earmarked $11.4B for employee bonuses. If Goldman were to award all of these bonus dollars this year, employees would average $770,000 in compensation. So, if one were to find his or her way to Goldman, the MBA should payoff.

MBA News: MIT Grads Consider Alternative Career Paths

mbaMission — Wed, 10 Jun 2009 11:13:44 +0000

The Boston Herald recently reported that graduates from the Sloan School of Management at MIT are adapting to the changing job market. The head of career development at Sloan estimates that 80-85 percent of the class has a job offer at this time, only a 5 percent decrease from last year. What is noteworthy is the type of jobs that students are pursuing. Without offering too many details, the article illustrates that students are shifting away from traditional industries or the latest fad and are instead pursuing personal interests, with one student joining a musical instrument company and another a Chinese start-up. Is it possible that a silver lining might exist in this tough job market – less pressure to conform and pursue banking and consulting jobs?

Compensation Report: Banks to Repay TARP and Liberate MBAs?

mbaMission — Wed, 03 Jun 2009 23:27:44 +0000

In this morning’s New York Times Dealbook, Andrew Ross Sorkin reports that banks are planning to raise massive equity stakes to repay their government TARP loans. Why is this important news for MBAs? The answer is that as long as the banks have TARP money, they will have to change/reign in their compensation practices and potentially cease hiring H1-B visa holders. So, once repayment is complete, salaries can rise, and internationals will again be able to pursue positions with these firms. With our tongues firmly planted in our cheeks, we suggest that prospective MBAs buy up some of that equity and help their own cause.

Compensation Report: Against Odds, Some Grads Find Wall Street Jobs

mbaMission — Thu, 21 May 2009 15:04:45 +0000

Recent news coverage about Wall Street banks have focused mainly on layoffs and government bailouts. And while it is true that thousands of finance jobs have been lost in the past year, the CNN article “Against Odds, Some Grads Find Wall Street Jobs” spotlights recent MBA graduates who have been able to find finance jobs.

The article profiles Mohamed Desoky, a recent MBA graduate from Emory University who will join the Royal Bank of Canada’s New York office as an investment banker. Mr. Desoky worked hard to turn his summer internship at the bank into a full-time position. He went through 48 interviews with many banks to get that internship and even arrived to work one week earlier than expected in order to shine. The article also references John Challenger, CEO of the outplacement consulting firm Challenger, Gray & Christmas, who says, “those who defy the statistics do so by remaining positive and hopeful. They also have to be flexible.”

Although the financial sector is struggling, jobs are still available for recent MBA graduates. Finding them might take a little longer and require a bit more work than in past years, but as Mr. Desoky’s experience demonstrates, getting a finance job after business school is nevertheless possible.

Compensation Report: Investment Banking Salaries Rising?

mbaMission — Tue, 19 May 2009 16:29:04 +0000

According to an article published on Reuters, UBS—Switzerland’s largest bank—has decided to increase some investment banking salaries to “retain employees in critical positions” and compensate for lost bonuses. This trend may seem counterintuitive amid a recession, wherein many banks are losing money. However, UBS believes this kind of move is necessary to remain competitive with other banks making similar decisions. For MBA students with an eye for finance, this surprising trend is entirely positive. Still, with high salaries yet fewer positions available, this field will remain very competitive for the foreseeable future.

Compensation Report: Banking Salaries Bounce Back

mbaMission — Thu, 30 Apr 2009 13:45:29 +0000

A front page story in the Sunday New York Times (“After an off year, salaries are bouncing back”) may have given hope to aspiring MBAs. It seems that banking bonuses are expected to bounce back to 2007 peaks, after an off 2008, made possible by the reserves major banks are setting aside. While absolute bonus reserves are lower than they have been in the past, headcount is also lower. So, on average, many investment bankers can still expect to see the bonuses that have been the inspiration for so many to pursue MBAs and head off to Wall Street. Of course, when the bonuses are in fact doled out, there could be significant criticism and a retreat. Only time will tell…

MBA News: “With Jobs Tight, MBAs Head for Home”

mbaMission — Wed, 22 Apr 2009 00:16:08 +0000

In this morning’s Wall Street Journal, Alina Dizik identifies a new employment trend among graduates of the Class of 2009. Dizik posits that MBA students, chastened by the weak job market, are having difficulty changing careers. Instead of forging on to find that ideal new job, many are grudgingly returning to their previous fields. While this situation may be frustrating for some MBAs who are intent on starting anew, these candidates can at least find some solace in knowing they have the qualifications necessary to win jobs at their old firms, “defeating” candidates who, ironically enough, have limited experience and are trying to switch careers. Dizik suggests that the long-term nature of this problem could undermine the MBA itself as the “idea of returning to an old career has some soon-to-be grads questioning the value of their degrees.” Indeed, these students are unlikely to see the traditional 74% salary jump that MBAs experience (GMAC data), but we surmise that the career changers are not going to see that bump either.

Compensation Report: Merrill Bonuses to Be Halved?

mbaMission — Wed, 03 Dec 2008 22:14:28 +0000

Many bankers are expecting the worst as bonus season approaches and news has potentially leaked from Merrill Lynch that its bonus pool will drop by 50% this year. Still, Bloomberg attempts to offer an encouraging note: “Even if Merrill set aside nothing for compensation in the fourth quarter, the firm’s 60,900 employees still would reap an average of $184,000 in compensation and benefits for the full year.” Of course, this would only be encouraging if your bonus was less than the average last year; it is doubtful that the average MBA at Merrill earned less.

Compensation Report: Smaller Bonuses Lead to Greater Results?

mbaMission — Tue, 25 Nov 2008 16:35:12 +0000

In an op-ed in the New York Times, Duke Professor Dan Ariely discusses his research on the effects of bonuses, revealing a somewhat counter-intuitive result: large bonuses lead to poor results with regard to cognitive tasks. Ariely mentions that he offered to test this hypothesis in an investment bank but, intuitively, could not find any takers.

Compensation Report: Declining Executive Pay?

mbaMission — Wed, 19 Nov 2008 20:06:51 +0000

Our use of “declining” above is indeed a double entendre – pay is declining and some are declining to be paid. The Wall Street Journal reports that Congress is considering compensation limits for firms who partake in the federal bailout – limits which include no bonuses for executives making more than $200,000 and no “golden parachutes”. Meanwhile, several firms, including Barclays, Goldman Sachs and UBS are not paying-out bonuses to their highest paid executives and UBS is changing its bonus structure to reward long term performance. Are the days of fat bonuses for MBAs over? Not likely, because there will always be competition for those who have the rare ability to make money for otherrs, but the times are definitely changing.