I, The Absolute

Comparisons are odious

Posted by itheabsolute on March 12, 2006

Numerous comments and mails on the salaries grabbed by the grads of IIMs Vs those of ISB.

While at a fundamental level such comparison looks funny, it is but human to commit to comparison.

In Strategy course, one learns that there are two levels of variables – industry level and firm level. Recent research proves that industry level factors explain only 35 % variance in a firm’s performance. The rest is explained by what is internal to the firm.

Similarly, the salaries that a b-school grads grab are explained by both – b-school level factors and individual level factors. And i have no reason to believe that the importance of the b-school will be anything more than 35 %.

There are grads of HBS who have difficulty in getting right jobs. I even hear that IIMs grads low on grades have difficulty finding jobs better than those found by some students of Tier – II b-schools. The lower salary numbers of ISB are not necessarily higher than the higher salaries of Tier II b-school.

Thanks to a fantastic alumni network,excellent brand and a rigorous admission processes, IIMs attract some of the best recruiters. But these recruiters would hardly offer the salaries that we are hearing now, if the students themselves are not good. No recruiter pays salary for the school; it is to the individual that the recruiter pays. Of late, IIMs have started to take experienced students, which has led to steep increase in the salary levels. The mind-numbing salaries are a reflection more of the genius of the person and less of the school.

ISB is a new school. It is yet to complete 5 years. Its alumni network is one of the weakest amongst large b-schools. It has a one year format. It takes only experieced students. It has tried out something new. Its brand is still growing. It will take time for ISB to work all things in its favor. Having said that, what ISB has achieved is by any standards no mean achievement.

Also know that, all b-schools (and firms too) do a lot of jugglery in calculating CTCs of the students. CTCs would include things one would never imagine. So that the numbers do not look skewed, the US b-schools (and magazines / press) reckon / compare salaries that the grads of various b-schools draw during the third year after they graduate.

To end, if people dont care about all these and just want to know numbers, I cannot reveal the numbers. But I am sure when the numbers come out ISB’s numbers will be higher than those of other schools.

PS: CTC could include things as wierd as the rent for the space occupied by the employee, the maximum bonus that he can draw (as against minimum bonus), stationery, utility expenses incurred on the person, training expenses, likely travel allowance, etc. basic things such as gross salary, min or average annual bonus, esops, incentives, sign on bonuses, provident fund, gratuity, superannuation, cash reimbursements can be genuinely included in the CTC.

12 Responses to “Comparisons are odious”

  1. Anonymous said

    NOT A IIM has said that the 200K USD salary are to be based in USA. THEY ARE ARE ALWAYS THE Barclays or the Deutsche bank or the Lehman which are based in UK. SO IT IS FAKE NUMBER.

  2. Anonymous said

    Outliers do not define the general population. I believe this simple fact seems to have lost on the quant jocks. For any meaningful comparison look at medians.

    Also the $200K offer isn’t that big a deal for investment banking in US. The base is approx $100K ($115K for goldman sachs) and a 100% of max bonus takes you there.

    Of course only one person got it and as I said before outliers do not define general population. I believe they forgot to teach this basic concept in IIM while they were busy teaching socialism.

  3. Hi all

    Thanks for your comments. Special thanks to those that tried to appreciate the underlying message.

    It is quite unfortunate that some dont seem to understand (or dont want to understand) the irrelevance on on-campus salaries for our careers. And i also dont think any kind of writing will change what one wants to think.

    all i can say is – everyone is free to think and write as he pleases


  4. Anonymous said

    Please realise that it is unfair to benchmark everything against the 34 lakh offer. That offer went to Surya Prasad (42), a Chennai-based deputy inspector general of police (1988) batch officer of Tamil Nadu cadre. He is joining as Country head at RPG Projects. It is an offer commensurate to his experience (16 years+)and capabilities.


    refer : TOI/Indiatimes, March 14th,

  5. Anonymous said


    I am sure that you guys have beaten the USD 193 K salary, but have you guys beaten the highest domestic offer of 34 Lakhs ?

    I hope you guys have !


  6. This is what I heard-the profile of the guy who got the 86 Lakh salary.
    IIT stud-MS in US- 5 yrs work ex there- NRI Applicant to IIM-A.
    86L package.:)

  7. Anonymous said

    Altough I definitely appreciate all the progress that ISB has made, I feel that your school is extremely poor in Public Relations with the press or media. I mean, look at the IIMs, their placements are covered by the press and the TV channels almost like the running commentary for a cricket match. On the other hand, although for the last 2 years, ISB had the highest salary amongst Indian b-schools, hardly anyone got to know about it…
    To be very honest, for a school of your stature, your PR dept sucks big time!!

  8. Extremely well written article. good to read. Very true. One of my friends in IIMA who got a good job with a pay package of 9 lpa. He was happy till he faced questions like “how come others got 86 lakhs, whereas you have got just 9 lakhs?” from his relatives. !!!

  9. Anonymous said

    I still dont think isb can break the 30 lakh domestic package … i really hope u guys can !

  10. Venkat said

    You post does clarify very well, what all can be added to CTC just to inflate it up–

    I would just say that converting a Foreign currency salary verbatim to INR is also equally misleading. Reference to a recent news item: $ 193000 in the US is really not as great as 86 lakhs. There are so many factors that go into it and its not fair to compare INR and FC salaries on the same scale. This is based on my humble experience of living in a couple of countries.

    Hope you would agree.

  11. Anonymous said

    Hey…very true! i completely agree w. this post.

    but i shld say im shocked to hear wat diff things can be added to the ctc!!! n in the post wen u mention that isb chooses exp ppl…i kinda think how cld it be poss? coz they adv 4 ppl to apply even w/o work ex. (or mayb i got it wrong in ur post/….)

  12. Anonymous said

    Hi Bharani,

    Your articles are great reads. I don’t know much about CTC compensation. Can you perhaps tell us about what it generally includes and how we should take CTC numbers.


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