General Electrics Financial

Management Program: The

Most Prestigious Corporate
Finance Gig Around?
by M&I - Nicolas
26 Comments | Corporate Development & Corporate Finance - Groups & Regions
Nicolas is the founder of 300 Finance Gurus and has advised more than 100 clients on
their cover letters and resumes. He also provides strategies on networking, LinkedIn
and interview preparation for clients in Investment Banking, Corporate Finance and
Private Equity (full bio at the bottom of this article.)
Theres a lot of debate around the best
place to start your career: Investment banking? Private equity? Corporate finance?
Equity research?
But if you go the corporate finance route, theres no debate over the best, or at least
most prestigious, option within corporate finance: General Electrics Financial
Management Program (FMP).
It has been around for almost 100 years (created in the 1930s), and 75% of GEsChief
Financial Officers went through it!
The only problem is that if you try to read about it online, you run into corporate
speak and buzzwords galore, but little real information.
I actually graduated from the program and then left GE to start my own business, so I
want to give you a realistic, non-sugar-coated version of what you do, what a
rotational program in corporate finance means, and just how lucrative / prestigious it
is.
Plus, well take a look at how it compares to IB roles and answer the #1 question on
your mind: is there any reason to forget about IB and become an FMP instead?
What Exactly IS a Financial Management Program (FMP)?
Just like investment banks hire interns to fill their talent pipeline, Fortune 500
companies such as General Electric do the same thing to fill their pipeline, division by
division.
GE was the first company to create a rotational program for recruiting promising
graduates and giving them exposure to different groups; programs at other F500
companies were inspired by GEs example.
The FMP is a two-year program with four rotations of six months each: you join a
specific division, such as GE Capital, and then you might do rotations in consumer
lending, business-to-business-lending, real estate, and airplane leasing.
There around 600 FMP members worldwide, including 300 in the US, and theyre split
between the two main sides of GEs business:
The Capital Side: B2B and consumer banks (Over 25% of GEs revenue comes
from financial services!)
The Industrial Side: Groups that sell products in industries like Healthcare, Oil &
Gas, Aviation
On the Job: Optimal Capital Structure, or Optimal PowerPoint Slides?
When the rotations begin, you spend your time not only on work assignments, but also
on classes and you actually have to pay attention and complete everything because of
a mandatory test near the end.
The work assignments follow the 3 main categories we laid out in the article
oncorporate finance jobs:
Financial Planning & Analysis: You analyze profitability, make short-term and long-
term forecasts, and find risks and opportunities.
Controllership: You improve processes and controls, and assist during quarter
closes and audits.
Treasury: You hedge interest rates, work with swaps, forecast funding needs for the
business, and analyze key working capital metrics.
Youll do at least one rotation in FP&A and one rotation in Controllership during the two-
year program since theyre the most important groups.
All the divisions above are separate entities, so your 4 rotations might look something
like this:
Consumer Lending FP&A
Real Estate Controllership
B2B Lending Pricing
Airplane Leasing Treasury
The sexiest rotations are internal M&A, asset management, or pricing, but they are
hard to come by unless you work in the GE Capital Division.
Is Any of This Work Actually Interesting?
Yes, but you have to be really careful where you complete your rotations. Here are a
few examples of work assignments in each group:
Pricing: You calculate Return on Investment for different initiatives, review the
models to adjust the assumptions, and speak to people in sales and operations to
check your numbers.
FP&A: You may own a P&L, and you create the financial projections for a division
and then pitch them to the FP&A manager and CFO.
Controllership: You will comment on and explain variances in Balance Sheet
accounts, and help with the technical accounting for multi-million dollar transactions.
As long as your work is related to day-to-day operations and forecasts, its interesting
and will teach you something new (check out our article on a day in the life of a
corporate finance analyst for more).
Be wary of headquarter rotations at the European or global level.
These sound good on paper, but they tend to get boring since a lot of the work consists
of consolidating data for 10+ divisions interesting to do once, but repetitive the
10th time around.
On the other hand, you do get more exposure to very senior people, so there is a trade-
off.
How Do You Get Placed?
During the first two rotations youre assigned to a group and a location, but you can
chose both of those for your two last rotations to some extent.
A lot of candidates assume that theyll be taken care of, but you need to update your
program leader regularly and then sell yourself to potential managers in other divisions
to get the rotations you want.
If you just indicate your preferences online, your chances of getting the rotation you
want are much lower.
The Classes: Time to Hit the Snooze Button?
Besides your work assignments, you also have classes:
Foundations: Accounting basics and planning sessions
Operations: Inventory, FX, and loan accounting
Controls: Audit and regulatory
Strategy: Operational strategy and competitive analysis
FMPs are based all over the world, so you dial in and go through exercises together and
then complete group exercises and business simulations.
Theres also an exam at the end of each module 15+ FMPs typically get together to
study and work on cases during the day, and then party at night.
The classes are not too difficult, but you need to pay attention for 2 reasons:
1. If you score less than 80% on two modules, youll get kicked out of the program.
2. Your grades influence your pay raises, so youre incentivized to study.
Overall, youll spend around 1-2 weekends before the exam practicing and studying and
about 2-3 hours per week on the classes the rest of the time.
The Benefits: Why Would You Want to Become an FMP?
Besides getting to write about the experience on your resume/CV, the main benefits
are the network and exposure, locations and travel possibilities, exit
opportunities, and pay roughly in that order.
Benefit #1: The FMP Network: How to Befriend the CFO
Of course, you meet 200+ other FMPs during exams and at events and conferences,
and you keep that network with you for life.
But the biggest benefit is the exposure you get to senior executives.
Once per rotation, you get to shadow an executive in my rotation, I spent one day
with Todd Smith, the CFO of GE Capital International, a division with $130 billion+ in
assets and 25,000 employees.
Its a great opportunity to ask questions about your career strategy, how to climb the
ladder to the CFO level, and to figure out if the job actually appeals to you.
Youll also attend dinners and roundtables with CFOs, CEOs, controllers and FP&A
managers on a monthly basis, and you get special attention from CFOs and managers
since most of them are FMP alumni.
Finally, youll also probably get the chance to pitch a new project to at least one officer
of GE which rarely happens otherwise unless you have 15+ years of experience.
Benefit #2: Locations and Travel Possibilities
Youre not working investment banking hours (think: more like 60 hours per week,
depending on your rotation and classes), and you also get more time for vacations (at
least 2 weeks per year in the US, and up to 5-7 weeks in Europe)
But the biggest benefit, arguably, is that you get to work in a different city for each
rotation.
So if you ever wanted to travel or work in different countries for short periods without
taking painful flights back and forth every week, this is perfect.
The only problem is that the locations arent exactly glamorous if youre in the US.
Think: Fairfield, Norwalk, etc.
And if youre on the industrials side, you work in cities with plants not quite as bad
as mining for gold out in Saskatchewan, but also not quite a 6-month rotation in
Hawaii!
European FMPs have it better since they do rotations in Paris, Zurich, London, Dublin,
or Prague on the Capital side.
Industry groups such as healthcare and oil & gas tend to be in more remote locations.
Moving every 6 months makes it tough to have a romantic life, but if youre young and
really want to live in new places it could be a great experience anyway.
Plus, GE pays for your apartment and your flights when youre doing a rotation abroad
so you could spend your salary on bottles, or wine tastings if youre doing a rotation in
Paris.
Benefit #3: Exit Opportunities: Got Upward Mobility?
Just like how investment banking lets you move into many other roles, becoming a GE
FMP also opens doors but theyre different, and sometimes less lucrative, doors.
Heres a rough breakout:
Around 80%+ of FMP graduates actually stay at GE and take on various finance
related roles.
The most popular one is audit, which attracts about 35% of graduating FMPs
worldwide.
They join the Corporate Audit Staff, or CAS, and then rotate every 4 months all over
the world, with all expenses paid for by GE.
Internal audit work isnt terribly exciting, and you also work a lot: 80+ hours per week.
But you do get a starting salary of $80K USD, with solid benefits and ~15% pay
increases per year.
CAS is also a fast-track to executive-level finance roles, and if you make it to your
5th year you could potentially become CFO of a division with only 7 years of
experience.
Outside of Audit
The 65% of FMP graduates who dont join CAS take other analyst roles within
GE,mostly in FP&A or Controllership. Some also join the internal M&A team or the
pricing department, but those are less common.
If you did great rotations and built a solid network, you can start managing a team of 2-3
people afterward but for most FMP grads, managing a team only happens 2-4 years
after graduation.
Starting salaries range from $70K to $75K USD in the US and in Western Europe.
Outside of GE
The FMP has a strong reputation, so youll be contacted for corporate finance roles at
other F500 companies.
You could also join a top audit or consulting firm. Firms like Deloitte actively recruit
FMPs, so its not too hard to get interviews.
If you went to a target school for undergrad and youre willing to put in the networking
hours, you can potentially jump to investment banking or private equity but its still a
tough move.
Overall, its in your interest to stay at GE because so many CFOs and managers are
FMP grads; nothing is guaranteed, but if you position yourself correctly its one of the
best ways to move up the ladder.
Benefit #4: The Pay
And now to the last, and arguably worst, benefit.
If you join as an FMP in the US or UK, the starting salary is $60K USD, with a raise of
up to 5% every 6 months (depending on your on-the-job performance and exam
scores).
So no, dont expect this to compete with investment banking, private equity, or hedge
fund pay although compensation does rise more rapidly after you graduate.
GE does pay for your apartment and car if you do a rotation abroad, which helps a lot in
a place like London, but international rotations are much less common in the US (to
compensate, they provide a housing allowance there).
The Showdown: Investment Banking vs. Financial Management Program
So lets answer that question youve been thinking about from the beginning: is there
any reason to become an FMP at GE rather than an IB analyst?
Pay & Prestige
Investment banking wins on both of these people are more impressed by Goldman
Sachs than by General Electric.
And even in the post-crisis world, IB pay still trumps FMP pay by a long shot.
The Learning Curve
Rotations get more and more challenging, so the learning curve doesnt flatten out like
in IB after your first year there.
FMPs also do at least one Financial Planning and Analysis rotation, which means that
theyre guaranteed to get exposure to very granular forecasts and 3-statement
modeling.
Investment bankers tend to stay much higher-level on the modeling side, and
sometimes dont even get in-depth exposure after 2+ years.
The Challenge
The big challenge for FMPs is making projects happen. Its easy to have tons of cool
ideas on how to improve your team, but its really hard to convince 25 people to
implement your ideas!
For investment bankers, the challenge at the junior level is not screwing up, and at the
senior level its more about winning clients and access to the best deals (see: ourChief
Financial Officer vs Managing Director competition).
The Exposure
FMPs have no contact with clients, which is another negative compared to investment
banking. Client exposure is a huge growth factor, and even if bankers dont see clients
much at first, they sure feel the pressure!
One place where FMP is better is exposure within the company, since you get a lot of
opportunities to work with senior executives. An IB analyst would never get the same
direct exposure to MDs and Group Heads.
Work & Lifestyle
There tends to be less grunt work than in IB roles you do use Excel a lot, but you
dont spend hours fixing font sizes in PowerPoint.
And since youre working at a huge company, you could potentially make a huge impact
if you figure out a more efficient business process that gets adopted everywhere.
The hours tend to be a lot better than those in investment banking, though you will have
busy weeks in areas like Controllership when the quarter is about to close.
Face time is frowned upon, and if you need to be at the office 90 hours a week to do
your job, your manager will start doubting your abilities.
Exit Opportunities
Investment banking wins here, since you have a wide range of different options both at
banks and outside banks and you could even move into some of the corporate finance
roles discussed above.
Being an FMP lets you move around within corporate finance, but its much harder to
make the move to areas like private equity and hedge funds.
To FMP or Not to FMP?
If your main goals are pay, prestige, and exit opportunities, youre better off starting out
in investment banking.
But if you want more interesting and varied work, with a learning curve that doesnt
flatten out as much, and lots of senior exposure, the Financial Management Program is
quite attractive.
This question goes back to the points made in the CFO vs. MD article: if you like the
varied work and the team-building you do as a CFO, think about the FMP.
But if you like the faster pace and the client / sales work you do as an MD, investment
banking really is the only place to start.
And if none of this appeals to you, theres always equities in Dallas consulting.
Stay tuned for the next article on how to break into corporate finance at the entry
level.
In the meantime, I hope you enjoyed the article and Ill take all your questions in the
comments!
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About the Author
M&I - Nicolas is the Founder of 300 Finance Gurus a website where he grills 300 Managing Directors, CFOs,
Vice-Presidents, Associates and Headhunters on their best networking and interviewing techniques.

Nicolas has also helped more than 100 clients land offers at top investment banks and Fortune 500 Finance
Departments. From Analyst to Directors, he coaches his clients from five continents on their networking
techniques, LinkedIn profiles; he edits their resumes and cover letters, and grills them during intensive
interview preparation sessions.

Hes been writing for M&I for three years on corporate finance and related industries topics and also gives
speeches on career performance to large audiences that include Fortune 1000 CEOs, executives
andambassadors! Forthcoming in 2014, look for Nicolas' book on Corporate Finance interviews.

If you want to know more about his coaching and resume editing services, please visit 300 Finance
Gurus or send him an email.