With unemployment near a 50-year low in a still-strong economy, starting pay for MBAs in consulting and finance set new record highs at the University of Chicago’s Booth School of Business. In a preliminary employment report on this year’s MBA graduates, the median salary for a consulting hire jumped $10,000 to $160,000 to start, while sign-on bonuses rose $5,000 to $30,000.
But it looks as if the lift in consulting pay occurred as the financial services sector significantly upped its game to attract more of Booth’s MBAs away from consulting. The starting median salary for graduates who accepted jobs in financial services jumped a whopping $25,000 to $150,000, with median signing bonuses of $40,000.
The hot job market for MBAs, ironically occurring just as interest in full-time MBA programs by young professionals continues to decline, sent total median pay for Booth’s MBAs to unprecedented levels. In all, the median pay–starting salary and sign-on bonus adjusted for the percentage of MBAs reporting a bonus–this year rose 12.5% to $163,900, up from $145,750 only a year ago.
PAY BOOST SHOWS A SCRAMBLE FOR TALENT AMONG GLOBAL CONSULTING AND FINANCIAL PLAYERS
That is a conservative number because it does not include other guaranteed compensation which Booth stopped reporting last year. Including an estimate of guaranteed bonuses received by 16% of the clqss, not including stock options or other perks, would bring total median compensation to $168,060, up substantially from $149,750 a year earlier.
Chicago Booth’s stats represent the first look at MBA pay for the Class of 2019. Other business schools will begin to publish their employment reports in the following months. But this first glimpse of the market shows a scramble for talent, particularly among the global consulting and financial powerhouses, that has caused the largest year-over-year increase in starting MBA pay in many years.
Two years ago, consulting overtook the finance industry as the top choice of Booth MBAs, a school where finance had long dominated. Last year, finance staged something of a comeback, edging out consulting for the top spot by the slimmest of margins: 31.6% for finance vs. 30.0% for consulting. This year, consulting came roaring back, capturing 34.8% of the class, while financial services hired 31.3% of Booth’s graduates.
THE TECH INDUSTRY WAITED ON THE SIDELINES KEEPING STARTING SALARIES FOR MBAS STATIC
Not surprising, the highest starting salaries achieved by a Booth MBA this year went to graduates who took jobs in private equity and consulting. At least one Boothie landed a $250,000 salary in PE, while another was given a $210,000 salary to start by a consulting firm. There also was a $190,000-a-year salary reported by a Booth MBA who entered the real estate business.
Most of the financial services jobs taken by Booth MBAs were in investment banking and brokerage, attracting 11.3% of the class. Diversified financial services was next with 6.5%, followed by private equity (5.9%), investment management including mutual fund firms and hedge funds (5.7%), and venture capital (2%).
One industry that held its pay offers static was technology. The median starting salary for those who entered the tech field was $130,000, exactly the same as it was last year, while the median sign-on bonus actually fell $5,000 to $30,000 from $35,000 in 2018. Some 19.6% of the Class of 2019 went into tech compared to 20.3% a year earlier.