How’s this for a starting salary right out of B-school: $350,000? That’s what a 2010 graduate of the University of Pennsylvania’s Wharton School received by accepting a private equity job in New York, along with bragging rights to the biggest payoff for an MBA in the country.
That base salary was three times the median pay for MBAs ($110,000) and 14 times what the lowest-paid Wharton MBA grad received ($25,000), who went to work in a media and entertainment-related company, according to an article in Fortune online.
The giant salary isn’t unique. MBAs from five other U.S. business schools … Wharton, Stanford, Chicago, Columbia and Northwestern … all report that some of their graduates received base salaries over $300,000 in 2010. And believe it or not, the $350,000 for the Wharton grad was not even a record for the school. A 2009 graduate pulled in a $420,000 job offer from a hedge fund in London. When you add in a signing bonus, relocation expenses and other perks, the total compensation for a top-tier MBA can easily reach half a million dollars in the first year out of business school.
Private equity continues to lure the best of the class of MBAs. Along with hedge funds, private equity pays the highest starting salaries. But PE firms are far more selective than consulting firms and investment banks. Texas Pacific Group, KKR, Blackstone, Bain Capital, Carlyle, Providence, and Apollo are among those known for paying the highest salaries.
However, a recruiter for a top private equity firm cautions that many of these MBAs receiving the highest salaries had worked as analysts at these PE firms before going back to business school. They had extraordinary work experience and track records in private equity already. So the sky-high salaries represent a bidding war among the top PE firms for proven star talent. In fact, many of them were pulling down big salaries before they decided to go to b-school. Some earned between $500,000 and $600,000 after just 1-2 years into their analyst programs.
What about you? Did an MBA pave the way for better compensation in your private equity job? Add your comments below.
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