This morning, the New York Times (“Rich and Rejected”) reported on a a familiar story and a surprising trend.
The familiar story is that banking bonuses are expected to fall by 30-40% this year, according to compensation consultants. Further, these consultants expect that bonuses will not increase again until 2010 . The surprising trend is that some mortgage providers are no longer willing to extend credit based on bankers’ expected bonuses and are demanding higher down payments, meaning that bankers’ dollars simply won’t go as far as they have in the past.
What does this mean for aspiring MBAS? Well, for those applying now, it might not mean that much. If the market were to recover by 2010, today’s applicants will be shielded from the worst of the downturn and will discover rising bonuses when they graduate. However, students graduating in 2009, can expect a tougher hiring environment and lower bonuses, meaning that their MBA ROIs will be affected in the short term.
