Wall Street’s Stunning Collapse At Columbia

Uris Hall, home of Columbia Business School in New York

Uris Hall, home of Columbia Business School in New York

For the first time ever, Columbia Business School sent nearly as many of its graduating MBAs into consulting as it did into finance. For a business school that had long been a primary feeder into Wall Street, Columbia’s 2014 employment report marks a rather remarkable decline in the financial sector since the Great Recession.

Only 35% of the Class of 2014 picked finance as their chosen career, down from 55.6% in 2008 when Lehman Brothers, a major Columbia recruiter, went bankrupt. The biggest decline occurred in investment banking and brokerage jobs–once a mainstay for Columbia grads. This year, those positions fell to a new low of 16%, from 18.6% last year and 29.4% in 2008. Just three years ago in 2011, more than half of Columbia’s class was still venturing into the world of finance.

Despite the massive shift away from finance, however, the Class of 2014 has done exceptionally well in the job market. The school reported that 83% of the class had job offers at graduation, while a healthy 97% had at least one employment offer three months later. That’s even better than the 95.1% offer rate in 2008 before the economy tanked and a complete recovery from the 85.3% offer rate for the Class of 2009, the graduates most impacted by the recession.

This years’s median salary rose an impressive 8.5% to $119,400, from $110,000 last year. Median sign-on bonuses of $25,000 fell $5,000 from last year when they were $30,000. Other guaranteed year-end bonus was $22,390, slightly higher tun the $20,000 reported last year. For a graduating MBA collecting all three forms of compensation, the total first-year pay package for this year would come to $166,790.


Columbia’s lessening dependence on the financial sector is far more dramatic than the decline in that industry at the University of Pennsylvania’s Wharton School, which also has a reputation for its strength in finance. From 2008 to 2014, Wharton MBAs who went into finance fell by 12.2 percentage points to 35.5%, a level about equal to Columbia. But in that same timeframe, Columbia MBAs landing finance jobs fell by a breathtaking 20.6 percentage points.

A spokesperson for the school says that the shift would be less substantial if not for a change in the way Columbia reports its career stats. In 2012, the school says it began including in career reports “sponsored students” who return to their employers. The 2014 numbers, the spokesman says, “are not true apples–to–apples comparison with the numbers from before 2012.” With sponsored students, the percentage going into finance is 35.0%, for example, but if you excluded students returning to their employer, the percentage would be 39.7%. Some 94 sponsored students are included in the latest data.

While several other business schools, including Stanford and Wharton, have shown growth in the private equity and venture capital sectors of finance, Columbia is reporting declines there as well. PE, buyout and venture capital jobs fell to just 3.2% of the latest class, down from 3.8% a year ago and 4.9% in 2012.


If you take out the VC positions, only 2.4% of the class landed jobs in private equity or buyout firms. That is the lowest percentage of PE-bound MBAs from Columbia in at least seven years. The number of Columbia MBAs landing jobs in venture capital is so small–less than 1%–that the school doesn’t report a percentage for them. In contrast, 15% of Harvard MBAs went into PE and VC jobs this year, while 10.2% of Wharton grads took that route. At Stanford, 17% of the class gained jobs in private equity and venture capital.

No less telling is the fact that several rival schools are not only placing far more students in these highly lucrative jobs particularly in private equity. But PE firms appear to be far more generous when hiring MBAs for these positions. This year, for example, Stanford MBAs who accepted jobs at PE firms reported median starting salaries of $170,000. Harvard’s median for PE, venture capital and buyout jobs for the Class of 2014 was $150,000. Columbia’s median for these jobs was $132,500, slightly higher than Wharton’s $127,500.

“There has been a shift in the industries that our students are pursuing and for which they are being recruited,” says Christopher Cashman, director of public relations at Columbia. “More Columbia students are obtaining jobs in the consulting industry than before. That said, we continue to have a healthy number of students interested in and pursuing careers in the financial services sector, and we feel that our numbers show the remarkable progress the school has had in diversifying the industries that actively recruit and hire our graduates.”

How Columbia’s Class of 2014 Compares

With Other Top Business Schools


School Median Base Sign-on Bonus Other Bonus Jackpot Graduation Offers Offers 3 Months Later
Columbia $119,400 $25,000 $22,390 $166,790 83% 97%
Harvard $125,000 $25,000 $34,700 $184,700 88% 93%
Stanford $125,000 $25,000 $31,500 $181,500 80% 94%
Wharton $125,000 $25,000 $27,000 $177,000 88% 98%
Dartmouth (Tuck) $116,000 $25,000 $25,000 $166,000 91% 98%
Michigan (Ross) $115,000 $25,000 $16,750 $156,750 89% 93%
Duke (Fuqua) $111,000 $25,000 $15,000 $151,000 87% 94%
Cornell (Johnson) $106,000 $25,000 $12,500 $143,500 87% 92%
UCLA (Anderson) $110,000 $25,000 $15,000 $150,000 75% 90%
Virginia (Darden) $110,000 $25,000 $9,500 $144,500 89% 94%
UNC (Kenan-Flagler) $100,000 $25,000 $16,625 $141,625 81% 92%
Texas-Austin (McCombs) $105,000 $25,000 $12,600 $142,600 80% 94%
Emory (Goizueta) $100,000 $25,000 $12,500 $137,000 90.4% 98.0%
Vanderbilt (Owen) $100,000 $15,000 $12,000 $127,000 83% 94%

Source: Business school employment reports & P&Q reporting

Notes: Jackpot refers to graduates receiving the median of all three forms of compensation: salary, signing bonus, and other year-end guaranteed bonus. Not all graduates are given all three. At Stanford, for example, sign-on bonuses this year were collected by half the class, while 38% of the MBAs received other year-end guaranteed compensation. An asterisk indicates average numbers rather than medians.

Differences in pay often reflect industry choices and geography. Stanford’s higher median base can largely be attributed to the fact that 12% of this year’s class went into private equity, which currently pays the most lucrative comp packages to MBAs. The median PE starting base salary this year was $170,000. At Tuck, for example, only 4% of this year’s class went into private equity and the base for those PE jobs was just $120,000.