Hire Wire Oct 04 2011

Salaries Rise for 2011 Graduates

By julie steinberg

Finance firms are shelling out more for less expensive talent while cutting back elsewhere in the ranks. According to a new survey, undergraduate salary offers rose an average of 4.7% this year for graduates majoring in business administration and management, economics and finance.

Overall, salary offers to the class of 2011 rose 6%, according to the Fall 2011 Salary Survey, published by the National Association of Colleges and Employers, with salaries averaging $51,171 up from $48,288 last year. The quarterly survey compiles information from college career services offices across the country.

Of the three finance-related majors, business graduates saw the highest increase, with a 5.4% rise. Economics graduates had a 3.9% increase and finance majors a 4.8% increase.

Incoming analysts on Wall Street can expect between a $60,000 and $70,000 starting salary, and usually receive a bonus equal to or three-quarters of the starting salary, said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm specializing in the financial services industry.

Starting salaries are on the rise, according to the survey, but that's not the case for bonuses. Both Goldman Sachs and UBS are said to be cutting bonuses or eliminating them entirely for some employees.

"The rollback will impact everybody, but it will be heaviest for the most senior and highest paid," said Johnson. "The mantra is the less senior you are, the less volatility you will have in your bonus."

Johnson doesn't think analysts will see their bonuses eliminated. He predicts instead of a $60,000 bonus, they may receive a bonus in the $40,000 to $50,000 range. Still, amid thousands of layoffs on the Street, analysts are being spared the brunt of them, as banks need cheaper labor to do grunt work as well and need to prepare the next generation of dealmakers.

Write to Julie Steinberg at Julie.Steinberg@dowjones.com



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