Monday, March 13, 2006

The Eyeball-popping $ 193,000 salary

IIM Bangalore's Gaurav Agarwal just made history with the 'highest ever' salary for for an Indian b school graduate. His $193,000 (105,000 pound) job with Barclays in London featured prominently on every channel and in every newspaper. The funny thing, though, is this is not exactly 'breaking news'.

What Gaurav received was a Pre Placement Offer or PPO after a summer stint with the company. IIMB tried to keep it under wraps but the info leaked out long ago. Way back in October 2005 this is what I wrote about it in Businessworld's B school special issue

Placement is months away, but some lucky rats have already crossed the finish line. Ten international PPOs (pre-placement offers) have been bagged by students at IIM Bangalore. The average salary: over $100,000 p.a.

But the toast of the town right now is Gaurav Agarwal, a second-year student who has got the 'highest-ever offer' of £105,000 p.a. That's $193,000, or Rs 84 lakh, and beats the previous year's IIM headline salary of $152,000 (IIM-A's Ravi Singhvi, HSBC London) by a comfortable margin.

The stuff I wrote last year about
a) These guys not being fresh faced 22 year olds
b) Issues like Purchasing Power Parity, Cost to Company etc
All still holds true. So I'm not going to repeat it.

What I find interesting is that while soaring salaries make people go ooh and aah every March, the real action is now happening not at final placement but summer placement itself. Which takes place barely 3-4 months after you join campus.

The practice has always existed - HLL, P & G, Citi used to be the sought after PPOs. But with investment banks coming in and recruiting for summers abroad, the stakes just went that much higher. As one IIM A student puts it:

As far as the students are concerned, a summer internship in an i-bank means bypassing one and half years of hard-core, maddening competition to secure an i-banking career abroad. It's a short cut.

This is standard operating procedure. At Wharton, summer internships are jokingly called 'ten week interviews'.

All's fair in love and...
There are, however, murmurs about the selection process...

When the final placements happen, companies have an important number to base their selections on - the CGPA. But when the recruitments for summers happen, the number's not known yet, or the time period is too short for someone to be judged purely by the CGPA. In such a situation, various factors play a role in deciding a candidate's suitability for the job, one of which is the student's past profile.

Another student says,"Sex, past academic performance, and past institute reputation is what I banks look at."

To put it bluntly, IITians and women are believed to have an unfair advantage when it comes to I banking summers in London and New York.

The simple mathematics of it is that if an I bank decided to pick up equal numbers of male and female trainees, the women have to face less 'competition' because there are far fewer of them in the batch to begin with.

The 'feeling' however is that girl are less deserving... The irony is that, at least in India, women have truly made a mark as I bankers! (think HSBC's Naina Lal Kidwai, J P Morgan's Vedika Bhandarkar, the ICICI women)

If you ask me, the entire process is anyways quite screwed. As one IIMB student describes it

Before being placed, I had to sit for GDs after GDs and interviews after interviews and companies passing rude comments "How is your work experience valid in our firm?" I was ushered in from one interview hall to another by volunteers enough to the extent that I sometimes had to strain myself to remember which company's interview i was sitting in.

In fact on one ocassion, a friend of mine forgot which company's interview he was in - he still managed to give those arbit globe answers and guess what! the company recruited him. I was god damn relieved to be out of the cruel process but atleast felt elated to have got a US placement.

A worldwide phenomenon
Incidentally, I have reviewed a book called the 'Running of the Bulls: inside the cutthroat race from Wharton to Wall Street' in the latest issue of Businessworld

The book focuses on students of the undergrad business program, which is extremely competitive. But change the names, locations and a few other specifics the attitude and mindset is the same - on both sides of the Atlantic.

"The idea of investment banking, not necessarily what investment banking is, but rather the idea of it, was sexy. It created delusions of grandeur of being a multi-millionaire in your twenties in even the most mild-mannered of students."

Chapters with titles like ‘Goldman or bust’ and ‘Battle of the Bulge Brackets’ would surely find resonance on IIM campuses. And the bit about 20 year olds magically discovering a 'passion' for finance soon after joining Wharton. There are also amusing details of students trying hard to impress the i-banker VPs who descend on their campus for Pre Placement Talks or PPTs.

Of course in India I haven't yet heard of information or woo-the-student sessions held at fancy restaurants over wine and cheese. But I'm told pizzas are now a standard fixture post-PPT and ensure a decent attendance.

The Wharton undergrads join as analysts at $45-55,000 salaries. After a few years they go back for MBAs and many rejoin the i-banks as associates at $100,000-120,000 salaries (the profile now also being offered to IIM grads).

Not all associates manage to claw their way up the ranks to the million dollar bonus positions. Many burn out, given the 80-100 hour work weeks.

But it works for many, and for the rest - there are always exit options. Right now, things have never been better for those angling for an i-bank/ overseas posting.

27% of IIM A's first year batch of 249 has been placed abroad while at IIM Bangalore the number of international offers is 41, twice the number last year.

Here's a fun read for that long haul flight.

Footnote: Shortly after I wrote this I was invited by NDTV to be on their 'India 60' show focussing on IIM salaries. Framing the question as 'Are IIM graduates worth their weight in gold' was a bit sensationalist I thought. But hey, I guess that's what TV is all about...

Have now had the unque experience of being on television 3 times in one week. The MTV CNBC Budget Fundas show was the most fun, besides the folks there were kind enough to make me look more presentable by doing my make up :)

Secondly, being physically present with the host/ anchor makes things a lot easier. The joys of speaking into a camera with a earpiece connected to New Delhi are highly overrated!

Anyhow, thanks to all this I have finally gotten over 'idiot box fright'. But any more appearances and I'll be competing with Mahesh Bhatt... ! Frightening thought.


  1. Hi Rashmi

    nice article ... i have just one doubt .. as far as i know a wharton undergrad with few yrs work-ex as analyst in an i-bank and then doin an MBA does not get 100-120 K$ ... he gets much more than that .... so IIMs are still not getting what wharton harvard grads get ... and there nothin wrong in that .. lets face it ..

  2. Am watching you live on TV now.! You are very young.:).I think itz the prior work experience thatz counting in ....Just imagine if the guyz had international work ex.! BTW,I hope the guyz enjoy the job that they have been offered...Afterall, in the long run, itz the work and satisfaction that counts and not the money.!What say?

  3. I sometimes wonder if a lot of these recruits know that the places(meaning the cities) where they are going like NY are darn expensive places to live and a $100K salary is not an astronomical amount for those places. Also a place like NY has federal, state and I beleive even some city taxes which result in the end amount that you get not that huge.

  4. "But the toast of the town right now is Gaurav Agarwal, a second-year student who has got the 'highest-ever offer' of £105,000 p.a. That's $193,000, or Rs 84 lakh"

    Even you have converted the salary to rupees when publishing it! This whole episode is unduly hyped. The old-economy parents assume the salary to be 84 lakhs, whereas between us, we know what it is "actually". I perfectly agree that it is an astronomical figure, but converting the salary to Indian rupees blows the whole thing out of proportion.

  5. 193 K is actually a really good salary, even for NY. Good for the guy!

    However, as someone pointed out, it is very important to keep things in perspective. 100 K in NY city is not a whooping amount. In fact, I was talking to one of my friends and he said that with 80 K in NY, you might have to beg. Not literally of course, but you know what he means.

    I am not trying to demean the placements of all these really bright ppl from IIMs, some of my friends just passed out. But it is important for all those aspiring CAT takers to realize that there is no gold mine, not even if you go to HBS.

  6. I am quite amazed at the manner in which the media freely discusses these salaries earned by certain individuals and the firms that offer it.. I always thought that the amount a person earns is supposed to be piece of confidential information, not open for discussion either in the national media or blogs like these (unless ofcourse the individual in question happens to be a CEO or part of the senior management of a firm because of which there might be regulatory reasons for disclosing salaries). Or are the institues in question (IIMs) to blame for throwing around these figures in their quest to establish their superiority over their rivals..I am surprised that the firms in question, especially the international ones, have not objected to this practice..Even in the B schools in the US and elsewhere, data on average compensation, max, min, std dev etc for the graduating class are made public, but neither are individuals nor specific firms identified in such reports..It just goes on to show the hopeless immaturity that prevails in Indian B schools among both the people who run it and the students who pass out...

  7. This is a very nicely written article. I don't want to comment on the fact that people earn so much money just by doing an MBA degree as i feel that a mettle of a person can only be seen in live environment.

    But one thing is for sure. if some one is talented, he needs to be rewarded for it. This also in a very vague sense the value that a multinational organization is willing to pay to get the services of an intelligent Indian. India in general can become prosperous only when such contributions are made. This is my impression.

  8. Tried to Google for a copy of Gaurav's CV, but cudnt find anything. If anyone knows abt what his background is,etc , do post it here. Thanks in advance.

    As always, Rashmi , you have a great thing going here. Good work!


    profile of students.. this news item actually came long time back,..

  10. "any more appearances and I'll be competing with Mahesh Bhatt... ! Frightening thought."
    Rashmi we need a lot more of 'thinking' people like you on the TV......

  11. This comment has been removed by a blog administrator.

  12. hey rashmi..
    wht i have to say is tht.. its not all abt the money ..

    it makes for great headlines, but thts abt it ...
    i dont think these IIM grads look tht much at the money b4 takin up the job

    BTW,1 IIM A grad was offered $1.85K, n now the company is considering increasing it to match th 1.93k given to a IIM B grad ..

    Talk abt competition n maintaining profiles..

    neways, rashmi.. u can employ me at JAM .. i ll be willing to work part time ..

    - MSK

    --til later,

  13. Mahesh Bhatt!! *Shudders*

    Been reading Jam since years, these days, however, I stick to reading it online.. :)

    Nice blog! :)


  14. Wonder why there is so much of Hype about salary these days, Honestly it looks more like an advertisement which has been paid for by these B scools rather than a piece of useful information or News. A Month before a similar article appeared about VGSOM the management school of IIT Kharagpur.

  15. hey!

    saw you on ndtv the other day! you put things too mildly! i mean your mba caste system articles were a lil more ...hmmm.....

    besides you spoke only global gyan.

    the peeps who want that IIMB guys profile. well it SEEMS hes from IIT, then did his MS in US , worked for 5 years and then came to IIMB as NRI student and now going to london.

    i wonder why WE pay taxes?! :)

  16. I was just reading your earlier
    post @

    I wonder what the avg salary @
    IIM-A & B are these days ? Around 10 Lakhs would be my guess. Anyone wanna pitch in ?

  17. You.. ? And then 'idiot-box' fright ? Didn;t quite seem like it - I thought the name sounded familiar - when I was flicking through channels and stopped at the MTV CNBC Budget thing.

    Ah - then the name clicked - the whole IIPM thing - which was long overdone. Oh God - somebody had to open the can of worms and I'm glad you did it.


  18. very interesting and informative post.
    but this single post of yours (and i admit it's all i've read) has SO many self-plugs..! couldn't help noticing.
    is that the norm of your writing style?

    that said i enjoyed reading your post and look forward to more

  19. What I am looking for is statistics like the following:
    * Salaries vs. no. of years of work ex
    * Salaries by background (engg/arts/commerce)
    * Salaries in non I-Bank areas, such as technology, FMCG
    * Profiles in most of these areas
    * How these compare with B Schools abroad: Wharton, Harvard, Kellogs, Stanford?

    I do not know why the buck always stops at the dollar amount, never going into details. Guess the world is so enamoured by big dollar salaries that they hardly ever try to look more closely.

  20. just found a very nice article on IIMC Placements
    check it out,curpg-3.cms

  21. Hey Rashmi!

    ur article on iBanking in Business world was cool. Thanks for telling us about Chet and his life.

    ~ Krishna

  22. Very well written . But just wanted to point out here that the 'highest ever' salary offered to an Indian bschool grad was a $ 225,000 package offered to an IIMC grad in 2001. Check out

  23. Hi,
    Very well written and prolly the only factually correct article I've read since I started reading after finals.
    herez my take on it as an insider and a participant in the mayhem that is called b-school placements..

  24. yeah the blog is really right about depicting the b school placements.
    I would like ot point out, that the successful women in banking india did it without affirmative action, and though there are many deserving candidates among women getting jobs across IIMs, there are an equal number who wouldnt have got the job if they hadnt been women. (unless in interviews they display some talent or intellect that one couldnt observe in 2 years as a batchmate)

    this is not a case of sour grapes anyways, though missed the bus in my summers got what i wanted in the finals anyways

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