Where Wall Street & Finance Gets MBA Talent

banking and finance

You don’t have to look very far to find that finance just isn’t want it used to be, especially when it comes to recruiting MBAs from the very best business schools known for turning out the kinds of financial wizards loved on Wall Street. Just look at the declining numbers of Columbia Business School MBAs who go into the world of finance.

In 2008, just before the collapse of Lehman Brothers, a major recruiter at the school, 55.6% of Columbia’s graduating class went into finance. Last year, the number was down to just 37.1% and that was an improvement on the 35.0% a year earlier when CBS sent nearly as many of its MBAs into consulting as it did finance.

Still, many of the most lucrative MBA careers reside in the financial sector, which continues to draw substantial numbers of new graduates every year. Goldman Sachs, Morgan Stanley, JP Morgan/Chase, Bank of America Merrill Lynch, Deutschebank, and Blackstone are just a handful of the most prestigious firms in finance. The business schools you would expect to find at the top for supplying the most MBA talent to financial services are exactly those at the top: Columbia, Wharton, Chicago Booth, and New York University’s Stern School of Business, in that order.

HARVARD AND STANFORD EACH SENT 31% OF ITS GRADUATES LAST YEAR INTO FINANCE

And the big money entices large percentages of MBAs from both Stanford University’s Graduate School of Business and Harvard Business School. After all, for the 31% of Stanford grads who went into financial services last year the median base pay was $150,000, with a median sign-on bonus of $40,000, and median other guaranteed compensation of $108,750. You read that correctly. Of course, only a small percentage of the MBAs get the guaranteed bonus, but that’s a big number, nonetheless. And at HBS, where 31% of the Class of 2015, also opted for finance, the compensation is equally impressive: $140,000 median base, $40,000 median sign-on bonus, and $82,500 in other guaranteed bonus.

So which schools are the best feeders into the financial universe. An analysis of 2015 employment reports by Poets&Quants shows some surprises. Cornell University’s Johnson Graduate School of Management is way up there, with slightly more than a third of its graduating class in 2015 headed into finance jobs. So is Georgetown University’s McDonough School which sent 33% of its MBAs into finance last year. Those percentages are well above the 20% or so median for a Top 25 U.S. business school.

Among the top schools you can also anticipate who would most likely be near the bottom: The MBAs at MIT’s Sloan School of Management clearly aren’t all that financially oriented, even though the stereotypical image of the place is as a quant haven. Only 12.9% of last year’s graduating MBAs from Sloan accepted jobs in the financial industry. That’s less than Indiana University’s Kelley School or UNC’s Kenan-Flagler Business School (see table below).

AN MBA FROM COLUMBIA BUSINESS SCHOOL GOT A $467K GUARANTEED BONUS LAST YEAR

Beyond the general numbers, however, are even greater rewards for the lucky few. Private equity and venture capital firms pay among the highest compensation packages to MBA graduates. The schools that sent the most MBAs into those two fields? Stanford, Harvard, and Wharton. It may be surprising to many, however, that in 2015 Northwestern University’s Kellogg School of Management dispatched as many MBAs into PE/VC jobs as Columbia Business School, 5.4% versus 5.3%, respectively.

Just how richly rewarding these jobs are is pretty visible in school employment reports. Last year, for example, a Columbia Business School MBA who landed a job in private equity bagged a $467,000 guaranteed bonus in his first year. The highest base salary paid to an MBA in finance at Stanford last year was $267,000 for a grad who took a job with a hedge fund–that starting salary does not even include signing bonus or other guaranteed compensation. Almost certainly, he had to have previous PE experience and a remarkable record of performance behind him. Private equity firms paid among the highest pay packages awarded to MBAs at Stanford last year. The median base for a PE-bound MBA at Stanford was a whopping $152,500, with a median sign-on bonus of $25,000, and other median guaranteed bonus of $140,000.

(Turn to following page for our table breaking down all the numbers in finance by school)

About the Author...

John A. Byrne

John A. Byrne is the founder of C-Change Media, a global digital media company of higher education content. C-Change now has five websites, including Poets&Quants, and the author or co-author of more than ten books, including two New York Times bestsellers, and is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, and editor-in-chief of Fast Company. He also is the creator of the first regularly published rankings of business schools.