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<p>No, the surveys are completely completely unclear. In fact, I was just talking to somebody about this at length.</p>
<p>What the surveys measure is the PREDICTABLE parts of your compensation, for example, your signing bonus, your tuition reimbursement, your guaranteed bonus, etc. These are all things that you know for certain you are going to get (as long as you don’t get fired or quit in your first year). So, really, this is just “salary” by another name.</p>
<p>However, the point about banking is that much of the compensation is UNpredictable. You just can’t be certain about just how much your year-end bonus is going to be. So the surveys tend to not report it at all, or if they do report it, only report the ‘gauranteed’ part of the bonus (which is akin to salary). </p>
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<p>Well, the truth is, this is not an entirely fair statement, because the fact is, if you as a banker or consultant are not pulling in enough profit for the firm, you will be fired. So it’s not really that the consulting salary is that much safer. In bad economic times, they are both going to be making zero because they will both be unemployed. The difference is that when the times are good, the banker will be making far more than the consultant will. In other words, the downside for both is the same (in that both will out on the streets), but the upside is clearly better in banking. </p>
<p>During the economic downturn of 2001-2002, thousands and thousands of bankers and consultants got laid off. </p>
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<p>Very funny you should ask, because I was just reading Trader Monthly magazine, and they just published their Trader Monthly 100 List of the estimated 100 highest paid bankers/financiers in 2005. #1 on the list was the legendary financier and corporate raider T. Boone Pickens who made at least $1.5 billion last year, and almost certainly more as part of his company BP Capital (an equity firm that he owns). </p>
<p>Then there is Steve Cohen and his eponymous hedge firm SAC Capital Advisors, who made at least a $1 billion, Jim Simons who made about a billion from his hedge fund, Renaissance Technology Ventures, etc. Heck, #10 on this list made an estimated $300-350 million. </p>
<p>Now of course one might say that these aren’t “really” bankers, but are really founders and owners of hedge funds and private equity firms and whatnot. That’s true. But then the question is, how do you get to be the founder of a highly successful hedge fund or equity firm? The answer for many people is to have a stint as a highly successful banker. That’s how you can build your network and build credibility in the industry such that investors will want to put money in your firm. For example, Cohen, after getting his MBA at Wharton, started off as a Wall Street options trader at Gruntal (now part of BankAtlantic Bancorp). </p>
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<p>There is no doubt that banking (broadly defined) pays far better than even corporate management. When it comes to money, the only thing that can beat banking is pure entrepreneurship, ala Bill Gates style or Brin/Page style. </p>
<p>Is it possible to go into corporate management from banking? Of course. Many do. Obviously most of them go to the corporate finance department. But if you do well there, you can go almost anywhere in the company. The CFO position is often times the 2nd most powerful position in any company. </p>
<p>For example, take Oracle. The co-President and CFO of Oracle is Safra Catz. She was former MD at Credit Suisse. The other co-President of Oracle is Charles Phillips, who was a former MD at Morgan Stanley. </p>
<p><a href=“http://www.oracle.com/corporate/pressroom/html/scatz.html[/url]”>http://www.oracle.com/corporate/pressroom/html/scatz.html</a>
<a href=“http://www.oracle.com/corporate/pressroom/html/pressportal/exec/cphillips.html[/url]”>http://www.oracle.com/corporate/pressroom/html/pressportal/exec/cphillips.html</a></p>