Private Equity Nabs Record Harvard MBAs

by John A. Byrne on

Hello private equity. Goodbye social enterprise.

Companies in private equity and leveraged buyouts snared the largest percentage of Harvard MBAs in history, according to the latest job stats from Harvard Business School. A new record 14% of the Class of 2011 headed for jobs in those two fields, up from 9% a year earlier and the highest since 2006 when PE and LBO jobs were taken by 13% of the class.

It’s not hard to understand why. Private equity jobs were among the highest paying jobs this year. Only jobs with hedge funds and venture capital firms paid more.  The median base salary in PE was $135,000, some $10,000 over the class median. A third of the students who took these jobs were given median starting bonuses of $25,000, while 27% reported getting median “guaranteed other compensation” of a whopping $120,938.

Some 7% of the Class of 2013 headed for hedge fund land where the median starting salaries were $150,000. Some 38% of those graduates got median signing bonuses of $20,000 and 23% of them reported higher “guaranteed other compensation” $150,000. The total median pay package for a hedge fund player who landed a signing bonus and other comp was in excess of $300,000. The smallish number of MBAs who ventured in VC–just 1% of the class–landed jobs that paid median base salaries of $142,000.

Interestingly enough, the percentage of the Class of 2011 that went into non-profit and government jobs fell to just 2%, down from 6% a year earlier and the lowest recorded percentage in the past ten years. The median pay for Harvard MBAs in these jobs was $90,000—with no signing bonuses or guaranteed other comp. It was the lowest base pay reported.

Overall, financial services—a category that includes private equity, investment management and investment banking–took the largest percentage of Harvard MBAs—41%, up from 34% last year and 31% in 2009. Not surprisingly, consulting was next, capturing 27% of the Class of 2011, up from 24% last year. The median starting salary for consultants was exactly the same as the class median: $125,000. Some 94% of Harvard MBAs who went into consulting got median signing bonuses of $20,000 each.

The job and salary stats are especially ironic because Harvard accepted fewer finance types into its latest entering class. Admits from private equity and venture capital fell to 13 percent from 18 percent a year earlier, while those from the investment banking and investment management fields dropped to 12 percent from 14 percent. All told, there is a decline of seven percentage points in finance types, year over year.

Harvard Business School grads who accept jobs in India and China receive the lowest compensation of their classmates, according to Harvard. For the Class of 2011, whose median base salary was $125,000, Harvard MBAs who took jobs in India or China are getting $25,000 less—just $100,000.

And none of the MBAs who went to India reported receiving either a signing bonus or other guaranteed compensation. That’s a big difference from the rest of their classmates: Nearly three out of four in the class received median signing bonuses of $20,000 each, while 17% of the class reported getting another $35,000 in median guaranteed other compensation.

The highest median salaries were captured by Harvard MBAs who went south—to fast growing Brazil. They reported median base salaries of $134,000, some $9,000 above the class median and some $19,000 below the $115,000 median salaries earned by graduates who took international jobs. About 45% of the MBAs who landed jobs in Brazil also received median starting bonuses of $40,000, twice as high as the median for the class.

 

  • Ranjit

    John,
    Of the students who did end up going into the ‘Financial services’ industry post their Harvard MBA, do you know how many of them were already involved in this industry prior to joining the HBS MBA program?

  • Furious Styles

    Do you think this was the case at the other top 5 (Stanford, Wharton, Columbia and Tuck)?

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Furious Styles,

    Not sure, yet. This is the month that schools post their career reports for the Class of 2011. Not all of them are out yet. But we’ll know soon enough.

  • alois de novo

    Goodbye social enterprise? You’re kidding me, right?

  • MBA 2012 Hopeful

    I think the Class of 2011 was one of the classes when Jay Light was the HBS dean so it makes sense to see many people heading into financial services including PE since that was when 20% of the class had a finance background. It will be interesting to see figures of class of 2012 and class of 2013 to really see if Dean Nohria’s initiatives to branch out and develop the social enterprise aspect. The really funny thing I remember from reading Philip Delves Broughton’s Ahead of the Curve is that high percentage of HBS graduates heading into financial services signals another recession down the road. If you see 2006 to 2007’s financial services figures, he has a really good point.

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