If B-School Professors are so smart why are they in Academia and not in Industry

Why are people in Corp dev, tech , capital markets, etc and not IB? Different strokes for different folks.

A PHD is about research. IB is about sales at a higher level and managing a process at a lower level.

And a lot of PhDs consult for HFs and other places that need high level research and make money on the side. Also, a tenured prof at a big school is well paying, prestigious and cushy.

All the big shot finance profs ( the ones whose work you read in school) manage money. They get funded by Wall Street, one of the conditions being that they have to explain their strategy. Wall Street is terrified one of them just might be earning excess returns.

This may come as a shock to you, but some people are fulfilled by things other than money and prestige...

B school profs are a joke unless you go to a very good uni at which point you start getting profs that have seriously stacked resumes who got bored and want to do something more relaxed/spend time with grandkids etc

Because they want to be academics, not practitioners. Apples to oranges.

Dude it's not like academia doesn't pay well; you can look up what the public institutions pay their professors and it isn't exactly chump change. I've seen several undergrad professors clearing 250-300k. The hours they work are justified and extremely reasonable, plus a lot of them enjoy the satisfaction of educating the youth. That's just the public university professors... think about what some of the bigger/seasoned professors at private universities are getting paid.

They move back and forth sometimes. Case in point --> Larry Culp.

I’d be curious what bschool profs make in comp. I’ve heard a long time ago it was around 250k for an accountin/Econ professor at a respectable institution.

What would a M-7 professor be earning in base?

Almost all of them consult on the side. Prestigious b-school professor is looking at what - 50k as an expert witness? Then any actual consulting business.

At Booth, many of our better finance professors also have multi billion dollar funds on the side (VC/HF's/AM/etc). You'd better believe that their status as a famous professor at a school like UChicago helps bring a lot of money in the door. They also not only have the leeway to publish research in line with their thinking, increasing their status, but they have incredibly bright students and faculty pushing and challenging their ideas at every turn, rather than a bunch of yes-men following your thinking at a fund. It's a great synergy. They make good salaries, but the pay is a drop in the bucket.

Plus they get TV spots, newspaper interviews, publications, etc. The marketing potential is unmatched unless you're a Dalio, etc and can rely on your own name.

https://thebestschools.org/magazine/highest-paid-college-professors-ame… https://poetsandquants.com/2018/08/11/what-business-school-professors-a…

Business is well represented in the Top 10 of the highest paid of all professors. If you're going to teach,,, Go to Thunderbird!

This question was not meant as an insult against business educators, more so an invitation to discuss why people choose this career path.

You asked, so here it is: rookie pay is 125-200 base (depends on discipline and level of school, plus "summer support" at upper half of schools (10% to "2/9ths"), teaching load from 3 per semester to as little as 2 per year at a top place…anything 3 or below is typically done in one semester. So, 8.5 months "off". Some meetings during that time, but you can usually Zoom in. Some schools (Minnesota for example) has 7 week semesters where classes meet twice as often. So, you can stack all the teaching in 7 weeks. So, 45 weeks off. Also, you don't have a boss in the traditional sense. Conferences are usually in very cool locations and work typically pays most/all. Because it's a nonprofit, you are in 401a/403b land with max ~50-55k. 10-16% retirement kicker is not uncommon, especially at publics that want to report low salary numbers. Blue Cross in retirement or free tuition for you kids is also a thing. It's a good gig.

That said, PhD programs have single digit acceptance rates. 1/2 flunk out, either courses (think read a dense book for next class) or comps or don't finish their dissertation. It takes 5 years. Only about 20-25% land a tenure-track spot. Top places only hire one person every few years. Again, hundreds of applications for one spot. To get tenure at a good place means getting multiple publications, which can take years with revisions, in journals with single digit acceptance rates. Politics are horrible. There are many tenured folks, called deadwood, instead of continuing to publish become wizards at Roberts Rules of Order and obscure university bylaws just to mess with people. It’s a weird job because you can stop your bosses boss from doing things because all curriculum changes require faculty approval (per accreditation) or just tell the head of the organization (University President) to go f-themselves. Tenure is a weird power that causes some people just become bitter backbenchers.

Significant pay raises often mean moving across the country for a new job and many good jobs are in the middle of nowhere. Think B10 schools. Pay tops out at $350-400. Some exceptions, say for a big grant hauler (school takes 1/2 as “overhead”), but generally that is a topped out endowed chair. It used to be a fun job, but these days…not so much.

Will say academia is extremely cushy. One of my roommates' dad is an ethnic studies and political science professor at our school. Dude comes to campus 3 days a week, is tenured, and essentially sets his own hours outside his class time and office hours. I have been to their house and it's pretty sick not to mention a block away from Apple HQ so I know schools shell out to faculty.

Anecdotes from my T20-T25 MBA program.

Academic can be extremely cushy for those who retired from their professional careers that weren't financially lucrative (academic, government) but they hung around teaching 1-2 classes a year (the two that come to mind were honestly not great teachers but everyone likes them because they have cool stories).

One of the younger professors has been around for a decade plus. Extremely well connected, think a "Executive in Residence" for a handful of PE / VC funds (never confirmed but I believe he gets carry economics at these places, I think he's also on board of advisors of a regional IB too -- guy seems like he is never idle). He's also on the board of a few smaller public companies. Been to one of his homes that was worth ~$5-6M in a MCOL area. Met a handful of well-known industry veterans through him and they all rave about how credible our professor was when they were building out their product / network as entrepreneurs. Many alum (even big shots) who happen to be in our city for a week or more try to get coffee / drinks with him. Professor has also gotten someone I know their dream internship at a startup they really liked with a few calls.