Accounting

The accounting compensation is going to be greatly overshadowed by the finance pay.  It just isn’t that sexy. Accountants don’t get rich through employment (with the exception of CFO/Director level executives) but it is definitely enough to put them in the upper middle class.

Starting with the exit from PA, the general rule is you should expect about a 15% increase in pay when you leave. Looking at the accountants above who stayed in PA for 3-5 years (60-75k) they should see offers ranging from 70-85K.  Those who stuck it out to 6-9 years at manager (85-110k) will likely get offers ranging 100-140k.

Those brave souls who stick it out in PA for the long haul can make it to partner, which normally ranges from $300k to several million depending on the size of the firm and years in the partnership.  Additionally advisory service partners make multi-millions in many cases.

Finance

The pay can be pretty insane because it is largely dependent on ones bonus. For example a first year investment banking analyst straight out of college can get an offer for $60k with a 100% bonus of $60k. The pay goes up at very high rate as well, and no matter where you are in finance whether on the sell-side or buy-side, you’ll be ahead of your peers who went to almost any other field.

Investment Banking Compensation

Analyst – First Year: $80k – $140k

Associate – First Year: $150K – $300K

Vice Presidents: $400K – $2M

Managing Directors: $500K – $5M+

Private Equity Compensation

In private equity it is a little trickier to gauge the compensation because it is largely dependent on the performance of the companies it buys. It also may not be 100% cash bonus but you may get “carry” which may not be realized for some time.

Pre MBA Associate – First Year: $120k-$200k

Post MBA Associate – First Year: $250-$1M

Vice President: $500k-$3M+

Hedge Fund Compensation

Hedge funds compensation is also difficult to determine because it is tied to the performance of the fund, as well as your performance as a trader. The hierarchy is also flat and there aren’t many layers of seniority, but it goes something like this.

Research Analyst: $150-$500k

Portfolio Manager: $500k-$10M

Fund Manager: $500k-2.2B*

*If you’re David Tepper of Appaloosa Management, you can take home $2.2B.

Outside of the buy and sell side, financiers may wish to go to work for a corporation, but will almost always take a pay cut. Positions in corporate finance, corporate development, and investor relations range from $100k-400k until VP/Director positions.

 

Continue below for the next part in the series – the lifestyle

Accounting vs Finance: Part 1 – Career Path

Accounting vs Finance: Part 2 – Compensation (You are here)

Accounting vs Finance: Part 3 – Lifestyle

Accounting vs Finance: Part 4 – The work