The juiciest parts of business profiles are often the bits in parentheses.
In the latest New Yorker, John
Cassidy profiles Harry
Kat, professor of risk management at Cass Business School in London, and
drops this in the mix:
(As a professor, Kat earns less than a hundred thousand pounds a year—about
a tenth of what he was earning as a financier.)
A hundred thousand pounds, of course, is $200,000. (These pounds-to-dollars
conversions are really easy right now.) That might be low by finance standards,
but it’s pretty high by finance-professor standards. The Association to Advance
Collegiate Schools of Business, or AACSB, has a salary
survey showing that the average finance professor makes $134,000 per year,
with new hires getting slightly more, on $142,300. Even the average dean makes
only $174,000. So maybe we shouldn’t be surprised that Kat is more than happy
with what he’s earning:
“I like my life as it is,” he told me. “If we made a lot
of money, I wouldn’t know what to do with it. I’ve got a house
here. I’ve got a summer house in Spain. That’s enough.”
I’ve often wondered how supply and demand works in the specific case of full-time
finance professors at business schools. Presumably any salary would be much
lower than what these people could make in the finance industry – so are
the business schools competing with each other for talent? Or is there more
of a gentlemen’s agreement to keep salaries down? Certainly the AACSB surveys
show that finance-professor salaries aren’t growing nearly as fast as finance
salaries – or even as fast as the salaries of the first-year associates
that business schools churn out.