What's Keeping Women MBAs from Earning Their Value?

Earlier this week, the Wall Street Journal posted an article summarizing the findings from a Catalyst study that female MBAs are still not earning as much as their male counterparts, despite having similar work and education backgrounds. There were 9,000 respondents that participated in this study, all of whom had graduated from business school between 1996 and 2007. On average, women earned $4,600 less in their first job out of business school than men. Plus, men are twice as likely to reach CEO or senior executive level in their current job than the women are.

Why is this happening? Are women still bound by a glass ceiling in the workplace? The WSJ interviewed Ann Bartel, an econ professor from Columbia Business School on the matter. She says that women are less likely to be considered for higher salaries and promotions because employers assume that women will eventually be taking leave to have children and start a family. But the blame doesn't fall entirely on employers. Many women don't strive as hard for the higher up positions for the same reason - the anticipation of starting a family.

Bartel goes on to say that in order for there to be real equality in the workplace, employers need to offer more flex-time or work from home options. That way, women who also want a family life will be able to move up the ladder and fully earn their value as an MBA - just as much as men.

I have hopes that we are moving in the right direction, though. The NYT recently reported that, for the first time in history, women outnumber men in the workplace. Over the last few decades, women have been steadily gaining a greater share of the nation's payroll, but the recent recession finally put women over the 50% mark. The article actually uses the term "man-cession" because men have been losing their jobs faster than women during this economic downturn. Even if men take the lead again after the recession is over, it's still gives me hope that women are quickly earning their fair share in the workplace. Women MBAs may not be lagging in pay and promotions for much longer.

2010 PRIVATE EQUITY COMPENSATION REPORT: A Must-Read for PE Aspirants

Glocap Search, one of the preeminent retained executive search firm focused on the private equity industry, has released a new 2010 report on the Private Equity sector. You'll remember Glocap, and their Senior Partner and head of their private equity practice, Brian Korb, as a guest on our show about "Finance/Banking Salaries in the Current Economic Environment". Below are their highlights from this year's report. If you want to buy the whole report (a steal at $2195.00!) see link at the end.


Glocap Search LLC and Thomson Reuters have released the 2010 Private Equity Compensation Report, an in-depth analysis of 2009/10 compensation at U.S.-based private equity funds. Following several consecutive years in which compensation had been on an upward trajectory, growth across all segments of the market (buyout/growth equity, venture capital and private equity fund of funds) has come
to a halt with total compensation now trending down, according to the report.
Much of the pullback in compensation can be attributed to a drop-off in fee income from slower deal activity and dramatically reduced fundraising. This is an about-face from the past few years when record-setting fundraising and a steady flow of larger deals drove compensation to new heights. The Report, which covers later-stage buyout/growth equity,
early-stage venture capital and private equity fund of funds, includes compensation data for
Analysts, Associates, Senior Associates, Vice Presidents, Principals, Partners, CFOs,
Controllers, Fund Accountants, Fund Marketers, Investor Relations professionals and
Administrative/Executive Assistants. There were no major categories in which
compensation increased.

Brian Korb, Senior Partner at Glocap and head of its private equity practice, noted that in
addition to the reduced fee income, investment professionals’ own expectations for
compensation have been tempered due to the layoffs that shook Wall Street. He added
that pressure to raise compensation was reduced further by the diminished threats from
hedge funds and competing private equity funds, which in previous years had lured away
top talent with lucrative offers. “This is the first time compensation has fallen across the
board in the more than 10 years that we have been tracking it. Nevertheless, this
environment provides a healthy wake-up call that private equity is not an easy money
business,” Korb said.

The report continues to show that compensation increases significantly as the amount of
capital under management rises. Traditional later-stage private equity/buyout funds still
pay the highest compensation levels followed by venture capital firms which, in most
cases, pay more than fund of funds. Among the highlights of the report are:

• Base salaries across most categories were relatively unchanged from last year’s
levels, with most of the declines in total compensation reflected in reduced
bonuses.
• Total average compensation for Senior Associates at buyout/growth equity funds
held relatively steady with only 3% decreases.
• Total average compensation for Vice Presidents at buyout/growth equity funds
was down 5% to $424,000, with bonuses down as much as 10% in some
categories.
• Fund of fund compensation across all levels was down 1-3%, the lowest decrease
among the three asset classes.

The Report, the ninth annual, analyzes base salary and bonus compensation for thousands
of professionals at buyout/growth equity, venture capital and private equity fund of funds
for the years 2006 through 2009/10. Compensation is segmented further by fund size for
each asset class. A unique characteristic of the Glocap-Thomson report is that it does not
derive its compensation data strictly from a survey, but rather from a combination of
actual placements executed by Glocap, candidate data maintained by Glocap in the
course of its search business (including expected bonus information) and input from
Glocap recruiters, fund professionals and human resources personnel.

To buy the full report, click here