Finance Professor Salaries

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.

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