Yes, in a recent article on Bloomberg, William D. Cohan points out that the top executives in the entertainment industry, including Les Moonves, who as a CBS executive cancelled Star Trek, make more than the top executives on Wall Street. This fact in itself is not all that interesting. Wall Street had a bad year…and I have no idea what media executives do exactly.
What caught my attention was what Cohan brings up at the end of the article:
“This apparent paradigm shift occurs infrequently, and could well signal the beginning of a new era -- the first in generations -- when the pay potential is no longer highest on Wall Street. When you combine that with just how miserable it is to work at one of those banks on a day-to-day basis, there may be value for the leaders of Wall Street to rethink not only their business models but also what they will need to do to continue to attract the best and the brightest when offering the highest pay is no longer an option.”
This issue, brought up by some random journalist, would seem to me like a bit of a waste of an article. But the article said at the bottom that Cohan was an investment banker. Curious, I looked up Cohan’s background and was surprised at what I found.
While he is an award winning investigative journalist, prior to his current career, Cohan spent 17 years on Wall Street. He was an MD for JP Morgan and spent six years working for one of WSO’s favorite drool-inducing firms: Lazard.
For certain people in the WSO community, I am sure the decision to go into finance was based on a genuine interest in the work and the ability to be good at it. But where do the decreases in compensation leave the many on WSO who were drawn to the Street by the challenging but extremely rewarding lifestyle?
There seem to be endless posts questioning whether a career in finance is worth it. What I am more interested in is: if people do decide that a career in finance is not worth it, where will they go instead? There are the obvious alternatives like management consulting and F500 programs. But where else would people go? Would high performing students really consider trying to enter the media industry with the promise of a challenging but well compensated job?
A big thing you mentioned that draws people into finance is as you mentioned, the thought that they have the ability to be good at it. People drawn into finance in general did well in their math courses even enjoyed them....maybe not to the point of majoring it. They also are smart and well rounded in their studies (high overall GPAs).
The less qualitative, more artsy and creative subjects...finance people were more on a level playing field with pure artsy and qualitative students...no real competitive advantage here. No real competitive advantage in pure science and math either (very good, but still no huge competitive in the pure academic stuff).
So where do they go? Finance/Business. Where people who have a mix of strengths, numbers/smarts and business sense/decent personality.
I think what these people don't realize which I also fell prey to in college, was that your competitive advantage of being well rounded could lead to great success in other fields as well, possibly more so because less people in other fields have the ambition that EVERYONE on wall st has.
For example, I have a friend from highschool who was on the same level as me in terms of grades and goals. He chose to be an engineering major while I business. He wasn't the greatest engineering student (he was fucking good though), but not noble prize winning (which I think people think you must be to be successful in these fields). He has a great job now at some firm that sets up high tech labs....and from what I've taken away from speaking with him is that he is going to rise fast (speculative) and be successful not because he is the smartest engineer there, but because of his other skills. He has vision. He envisions himself as the boss everyday and asks himself...is this how I would do this or that if I was in charge. He speaks his opinion when he feels justified...and has received ridiculously good feedback.
Cliffnotes: I think he is going to be in charge faster than us monkeys will be...and he likes his job...though I've also told that lie also.
It may sound bad, but I think being white in the engineering field he works in has helped him, mainly because I think people doubt that he knows as much as he does by his looks and then when he says intelligent things (or things that sound intelligent), they are very impressed.
he did it right to come in with experience. the bottom of the media totem pole is even worse than being an analyst. its an industry controlled by trade guilds on the creative side and very hierarchical organizations on the business side. most CEOs ad CFOs, even of small to mid caps, make more than all but the most senior and successful MDs, once realized options gains and benefits are considered, but we don't all have a crisis about going corporate.
People enter IB because the starting pay is the best for an entry level job. For those that stay or survive, they're practically guaranteed to be in the top 1-2% no matter how awful their bonus is. For most, that is worth it. The argument that the miserable banker lifestyle doesn't justify the lesser average salaries becomes less valid with experience because those that stay in the game become brainwashed, shallow, uninteresting people. You can't sit in front of a computer for 80-90 hours/week in a room full of highly charged males for 5+ years without going completely mental. For every well adjusted, actually interesting rainmaker, there are 20 severely maladjusted losers who get off on chasing the next big deal (and not getting it), getting steaks and wine on the company dime (and getting fatter), flashing their supposed wealth (even though they got shafted on bonus for the last 3 years and likely have minimal savings), and getting lapdances, hookers, or rub and tugs (because they're divorced or stuck in a love-less marriage).
I went in to banking because I wanted to do something meaningful with my life, I wanted to help people.
Lol
I almost spit water at my computer when I read HumPiranha88's post. funny stuff
I would wager most college students at 17 who are trying to choose their major aren't looking at which will give them the highest future earning potential of their job, they are trying to work out what they can get into and be interested in for the next 40 years of their life.
Most new college graduates apply with the companies in their field they think they have the best chance of getting a job at.
Not all. (Maybe not those with "tiger mum" parents). But most.
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