Fall is the time when Chicago’s top graduating MBAs—the would-be financial masters of the universe—sign on with Wall Street’s top investment banks. Until recently they could look forward to platinum-plated careers of 90-hour workweeks negotiating corporate mergers for annual salaries and bonuses that could stretch into the millions.
But the Wall Street meltdown has removed some big players from the mix: Bear Stearns, acquired by JPMorgan Chase; Lehman Bros., which descended into bankruptcy; and Merrill Lynch, gobbled up by Bank of America. As a result, there are fewer opportunities for students from the area’s top business schools: Kellogg School of Management at Northwestern University and the recently renamed University of Chicago Booth School of Business.
Fretting 2009 graduates are being counseled to lower their sights for regional or boutique banks, or—gasp!—jobs with the corporate finance departments. "They’re in heads-down mode," says Booth’s associate dean for career services, Julie Morton, of the U. of C.’s graduating MBAs. "They’re not wringing their hands, thank goodness."
Last fall, 105 graduating students, roughly 20 percent of their class at the U. of C., accepted investment-banking jobs at a median starting salary of $95,000, not including bonuses. Typically, more than half of U. of C. graduates take finance-related jobs. At Kellogg, slightly more than 70 students, or 12 percent of last year’s graduating class, took the investment-banking path. In 2008, about a quarter of Kellogg grads went into finance.
The surviving top-tier banks are still recruiting, but in noticeably smaller numbers, even as they lay off more senior executives. Fewer banks ventured onto campus this fall. The class of 2010 will feel even more pain with fewer summer internships on the drawing board.
In previous years, top banks typically offered as many as 18 to 20 summer internships to Kellogg students and then hired nearly all of them full time. This year, it is estimated the top banks offered jobs to fewer than half of their intern classes, says Roxanne Hori, director of career management at Kellogg.
If students didn’t get offers following their summer internships on Wall Street, "their choices decline significantly," says Hori.