Thursday, January 8, 2009

2009 Management Consulting Salaries

This post by an ex-Mckinsey analyst reminded of a simple truth about analysts:

Don't trust their analysis, because it's usually wrong.  They must earn the team's trust gradually through multiple cycles of demonstrated thoroughness and diligence.
There's also a corollary to it:
Once an analyst has earned others' trust in their analytical abilities, they should be promoted to senior analyst.
He's attempted to price compensation across management consulting, but it's just not right.  In salaries, a preliminary directional estimate just isn't enough.

Without further ado, here's the reality of top-tier management consulting salaries.  As I've pointed out before, every strategy consulting firm has the same standard employment structure.  For ease of conversation, I'll use McKinsey's nomenclature.  Also, these are baselined at the first year at that position (expect annual raises of ~10% in base salary per year for good performance).

Business Analyst:  (Straight from Undergrad)
Signing Bonus: $10K
Re-location Bonus:  Variable, but full moving expenses (assume $10K)
Salary:  $65K
Performance Bonus:  $5-15K

Sr. Business Analyst:  (1-2 years post-undergrad hire)
Salary:  $90K
Performance Bonus:  $10-20K

Associate:  (Straight from MBA or APD program)
Signing Bonus: $20K
Re-location Bonus:  Variable, but full moving expenses (assume $10K)
Salary:  $130K
Performance Bonus:  $20-30K
Extras:  Optional tuition repayment if summer-interned (worth ~$30-40K, depending upon school and scholarships, typically paid over a 2-3 year timeframe)

Engagement Manager:  (3 years post-MBA hire)
Salary:  $165K
Performance Bonus:  $40-70K (Dependent upon how much revenue you're bringing in)

Associate Principal:  
Salary:  $300K
Performance Bonus:  $200K-500K (Again, even more dependent upon revenue you're bringing in)

Salary:  $500K
Performance Bonus:  $250K-750K 
Equity Share: Variable, but additional

Source:  Consultant Ninja analysis

Anyone disagree with these figures?


Anonymous said...

The more junior level numbers look good to me (have no clue about the senior level ones).

Two small things - Sr. B.A. should say pre-MBA. And it might help to clarify that the MBA reimbursement is 30-40k/year for 3 years... not a one time payment of 30-40k.

Thanks for putting this up. I think a lot of people will benefit.

Consultant Ninja said...

Good points, updated.

Kevin said...

I'm just noticing this post now, after my salary post over at MC. Your numbers are very similar to mine and in fact, more thorough.

Kevin said...

As a response to your post,

#1 I'm glad that you're bringing more details to the numbers. It's an important discussion to have and there just isn't enough publicly available data

#2 I fully disclaim that many of the numbers are reached through my own experience and anecdotes, and the reason I don't attempt to break apart more senior-level pay/bonus/equity buckets is due to this fact

#3 The MBA tuition reimbursement (both for summer interns and Sr BA's entering business school) is $150 thousand over 3 years at the prevailing Stanford/Harvard tuition rates

#4 I think this dialogue is good and am looking forward to continuing the discussion with you, particularly if you have feedback or reactions to prior and future posts


offshore account said...

Having an MBA with limited consulting experience would not put you in the associate position but rather into a Sr. B.A. So I would not write pre-MBA for Sr. B.A.

Thursday, January 8, 2009