Highest & Lowest Paid MBAs of 2014

Highest & Lowest Paid MBAs of 2014 | Poets and Quants

Highest & Lowest Paid MBAs of 2014

moneytreeWhat's the upper limit on MBA pay, the biggest number an MBA from a top business school could command in today's marketplace?

The high end for base salary alone can be nearly three times the median at some schools, according to a new analysis of employment reports from the top business schools. But if you take into account sign-on bonuses and other year-end guaranteed compensation, the highest total compensation packages can easily reach half a million dollars.

For the Class of 2014, the highest pay appears to have gone to a Wharton MBA who received $350,000 in "other guaranteed compensation"–a number that exceeded every reported base salary for the year. If the graduate also bagged the median salary and signing bonus for the class, the MBA would have signed up for first-year total pay of $500,000. In all probability, the big prize went to one of five Wharton MBAs who gained jobs in the hedge fund field where the median–yes median–other guaranteed compensation was $150,000 in 2014, greater than the median base salary for the entire class of $125,000.

MBAS AT THREE SCHOOLS–STANFORD, HARVARD & WHARTON–HAD GRADS LANDING $300K SALARIES

The highest reported base salaries for 2014, meantime, were $300,000. At least two graduating MBAs from Stanford University's Graduate School of Business landed $300K starting paychecks, one in private equity and venture capital and the other in investment banking in Asia. At least one Wharton MBA also reported a $300K base, while at least a pair of Harvard Business School grads landed salaries in private equity and venture capital at the $300,000 mark. At Stanford, there were plenty of other big pay days for Stanford this past year: A pair of MBAs each landed $240,000 in "other compensation" in hedge fund and media/entertainment jobs, while yet another Stanford grad expected to pocket $200,000 in other year-end comp in investment management.

And the lowest salaries? Graduating MBAs at three prominent business schools–Columbia, Michigan, and Carnegie Mellon–all reported students accepting jobs for just $24,000 a year to start. Two of them were predictably in the non-profit arena, while a third was in consulting, probably in either India or Africa where the currency translation into U.S. dollars makes the compensation seem puny by comparison. More often than not, the lowest salaries were paid to MBAs who went into the social sector or government work. But in some cases the lowest sums were reported by grads who went into retail, media and entertainment, healthcare and technology.

The highs and lows, of course, are all extremes. Typically, MBAs who nail down the biggest pay packages of their class have highly desired skills, proven work experience, and successful pre-MBA track records that make a company pay up big time. "On the high salaries, it's usually a very unique and specific match between a company's needs and a student's relevant skills and experiences," says Sheryle Dirks, associate dean for career management at Duke University's Fuqua School of Business.

BRINGING A 'LOT TO THE TABLE ON YOUR START DATE'

A good example occurred at Northwestern University's Kellogg School of Management last year. One MBA grad had worked for Starwood Hotels & Resorts where she helped to build a successful customer reward program. The graduate was able to take that experience, along with her newly minted MBA, to a well-known fashion brand where she will build a similar program. "She has leverage and they don't have the skills or experience to do what she can do," says Mark Gasche, managing director of Kellogg's Career Management Center. "She can bring a lot more to the table on her start date. That's the kind of person who would get high pay. They bring a deeper, often specialized background to leverage in a negotiation." Her job offer fell outside the reporting three-month-post-graduation reporting period so her compensation wasn't included in Kellogg's overall numbers.

It's no accident that one of the two highest paid MBAs at MIT Sloan last year, both landing $180,000-a-year salaries, had more than five years of work experience. The other had three to five years of work history. "Students who command high salaries can show deep functional experience," says Regina Resnick, associate dean and managing director of Columbia Business School's Career Management Center. "You might already be a proven and successor investor, gone through our value investing program, and then be attractive to a hedge fund. Whatever the case, MBAs are well compensated and they are incredibly privileged. The degree really pays off."

At Columbia last year, the top end was achieved by someone who didn't even enter finance, the industry that typically pays the highest first-year compensation and a strength at Columbia. something of a shock. The highest reported base salary–$275,000–was scored by an MBA who took a business development job at a manufacturing company.

Many schools conceal the highest total compensation packages to protect the privacy of their graduates and to prevent applicants from having unrealistic expectations of what they can expect out of the MBA degree. So in virtually all cases, the numbers provided here are conservative. It is not known, therefore, if the MBA at Columbia Business School who landed a $275,000 starting salary also received a sign-on bonus as well as other year-end compensation. For that matter, it also does not include reimbursement of tuition, relocation offsets, carry, or non-guaranteed performance bonuses or the value of stock options.

WHO GETS THE BENNIES DEPENDS ON WHICH INDUSTRY EMPLOYS YOU

Generally, only a minority of students receive these other benefits. Carnegie Mellon's Tepper School said, for example, that slightly over 22% of its graduates last year were given stock options. Wharton revealed that half of its MBAs received relocation money in 2014, but only 5% accepted jobs with reimbursed tuition. Sign-on bonuses obviously are more common than "other guaranteed compensation." At Wharton, 65% pulled down signing bonuses, but only 15% got a back-end compensation deal. It generally depends on the industry in which an MBA accepts a job.

If the big winner at Columbia merely received the median in "other compensation," as 75% of the students in the MBA's industry category did, it would have pushed the graduate's starting comp package up by $50,000 to $325,000, though the highest "other compensation" in that job category pulled down an extra $150,000, three times the median.

Columbia, by the way, had at least have a dozen graduates last year with starting base salaries of $200,000 or more, including a $270,000 base for an MBA who went into investment management, a $200,000 base for a graduate who entered the private equity field, and another $200,000 base for an MBA who landed a position in the entertainment industry. All those numbers are a far cry from the lowest reported salary—just $24,000 for a person who accepted a job in the education, government or non-profit sector.

HARVARD DECLINES TO REVEAL HIS HIGHEST AND LOWEST SALARIES OF THE YEAR

Unlike most business schools, Harvard Business School won't even reveal the high and low numbers for its graduates, preferring to provide only 25th percentile and 75th percentile numbers. For the Class of 2014, both private equity and venture capital industries posted $175,000 base salaries at the 75th percentile. So clearly, there were HBS graduates who easily won $200,000 starting pay. The "median" guaranteed other compensation for the 13% of the class that went into private equity and leveraged buyouts was a whopping $80,000. Throw in the median sign-on bonus of $25,000 and you're looking at first-year total pay packages for some that easily topped $300,000. The lowest base among the 25th percentile numbers at Harvard this year is not so low at all: $90,000, for went to work for a non-profit organization.

At Kellogg, the highest paid MBA of 2014—earning a $240,000 base salary—went into a surprising job in consumer products with a food and beverage company. Another lucky Kellogg grad, landing a $225,000 base, took a position in investment management. Another surprise: The highest paid sign-on bonus of $65,000 was paid to an MBA who went to a tech firm involved in Internet service or e-commerce.

MBAS CLAIM THAT THE COMPENSATION IS PRETTY MUCH THE LAST REASON THEY ACCEPTED A JOB

How important are the big numbers? If you believe surveys that track MBA opinions about why they accept a job, it has little to do with compensation. When MIT Sloan asked its Class of 2014 graduates the reason they accepted an offer, the vast majority–32.5%–said it was for the growth potential. Some 16.1% mentioned "job function," 15.4% industry, 12.8% job content, 7.9% people or company culture, 5.2% prestige of employer, and 5.2% the location of the job. Only 3.6% of the graduates said they accepted a job because of the pay dangled before them.

One interesting tidbit to take away from the highest numbers is that most of them occur at the most highly ranked business schools. Those whopping pay days outside the norm are far less likely at lower ranked MBA programs. Indeed, the highest paid grads at Carnegie Mellon, Vanderbilt and Washington University all hit the standard base pay offer from a top consulting firm: $135,000.


MBA employers

The Highest Reported MBA Salaries of 2014

School Compensation Industry
Penn (Wharton) $350,000 (Other year-end comp) Unknown
Stanford $300,000 (Base salary) Investment Banking
Stanford $300,000 (Base salary) Private Equity
Penn (Wharton) $300,000 (Base salary) Unknown
Harvard Business School $300,000 (Base salary)* Private Equity
Harvard Business School $300,000 (Base salary)* Venture Capital
Chicago (Booth) $275,000 (Base salary) Private Equity
Columbia Business School $275,000 (Base salary) Manufacturing
Northwestern (Kellogg) $240,000 (Base salary) Consumer Products
Dartmouth (Tuck) $225,000 (Base salary) PE/Venture Capital
Duke (Fuqua) $210,000 (Base salary) Consulting
New York (Stern) $200,000 (Base salary) Real Estate
Cornell (Johnson) $180,000 (Base salary) Consulting
Michigan (Ross) $165,000 (Base salary) Healthcare/Pharma
MIT (Sloan) $180,000 (Base salary) Healthcare/Pharma
MIT (Sloan) $180,000 (Base salary) Software/Internet
Virginia (Darden) $160,000 (Base salary) Law
Washington (Foster) $160,000 (Base salary) Unknown
Vanderbilt $135,000 (Base salary) Consulting
Carnegie Mellon (Tepper) $135,000 (Base salary) Consulting
Washington Univ. (Olin) $135,000 (Base salary) Consulting

Source: Business school employment reports

Notes: An asterisk indicates an estimate


MBA students at the Tuck School of Business at Dartmouth College

MBA students at the Tuck School of Business at Dartmouth College

The Lowest Reported MBA Salaries of 2014

School Compensation Industry
Columbia Business School $24,000  (Base salary) Education/Non-Profit/Government
Michigan (Ross) $24,000 (Base salary) Consulting
Carnegie Mellon (Tepper) $24,000 (Base salary) Non-Profit
Virginia (Darden) $28,000 (Base salary) Non-Profit
Cornell (Johnson) $45,000 (Base salary) Unknown
Chicago (Booth) $46,136 (Base salary) Retail
MIT (Sloan) $48,000 (Base salary) Business Development
Northwestern (Kellogg) $50,000 (Base salary) Manufacturing/Telecom
Harvard Business School $50,000 (Base salary)* Non-Profit
New York (Stern) $51,000 (Base salary) Media/Entertainment
Wharton $52,000 (Base salary) Unknown
Vanderbilt (Owen) $53,000 (Base salary) Technology
Duke (Fuqua) $53,500 (Base salary) Healthcare Services
Stanford $55,000 (Base salary) Government
Dartmouth (Tuck) $60,000 (Base salary) Technology
Washington Univ. (Olin) $60,000 (Base salary) Consumer Products
Washington (Foster) $60,000 (Base salary) Financial Services

Source: Business school employment reports

Notes: An asterisk indicates an estimate


money

Median Pay & Job Offers For The Class of 2014

School Median Base Sign-on Bonus Other Bonus Jackpot Graduation Offers Offers 3 Months Later
Harvard $125,000 $25,000 $34,700 $184,700 88% 93%
Stanford $125,000 $25,000 $31,500 $181,500 80% 94%
Wharton $125,000 $25,000 $27,000 $177,000 88% 98%
MIT Sloan $124,400 $25,000 $20,000 $169,400 85.9% 94.6%
Kellogg $120,000 $25,000 —— $145,000 85.0% 94.0%
Chicago $120,000 $25,000 $26,000 $171,000 89.8% 98.0%
UC-Berkeley $120,000 $26,865* $31,107* $177,972 79% 92%
Columbia $119,400 $25,000 $22,390 $166,790 83% 97%
Dartmouth (Tuck) $116,000 $25,000 $25,000 $166,000 91% 98%
Michigan (Ross) $115,000 $25,000 $16,750 $156,750 89% 93%
Carnegie Mellon (Tepper) $113,250 $25,000 $10,000 $148,250 79% 90%
Duke (Fuqua) $111,000 $25,000 $15,000 $151,000 87% 94%
Yale $110,000 NA $35,000 $145,000 80% 93%
New York (Stern) $110,000 $30,000 $20,000 $160,000 81% 94%
UCLA (Anderson) $110,000 $25,000 $15,000 $150,000 75% 90%
Virginia (Darden) $110,000 $25,000 $9,500 $144,500 89% 94%
Cornell (Johnson) $106,000 $25,000 $12,500 $143,500 87% 92%
UNC (Kenan-Flagler) $100,000 $25,000 $16,625 $141,625 81% 92%
Texas-Austin (McCombs) $105,000 $25,000 $12,600 $142,600 80% 94%
Emory (Goizueta) $100,000 $25,000 $12,500 $137,000 90.4% 98.0%
Vanderbilt (Owen) $100,000 $15,000 $12,000 $127,000 83% 94%
Washington (Olin) $100,000 $15,000 NA $115,000 86% 97%

Source: Business school employment reports & P&Q reporting

Notes: Jackpot refers to graduates receiving the median of all three forms of compensation: salary, signing bonus, and other year-end guaranteed bonus. Not all graduates are given all three. At Stanford, for example, sign-on bonuses this year were collected by half the class, while 38% of the MBAs received other year-end guaranteed compensation. An asterisk indicates average numbers rather than medians. An asterisk indicates a mean, rather than median, number.

Differences in pay often reflect industry choices and geography. Stanford's higher median base can largely be attributed to the fact that 12% of this year's class went into private equity, which currently pays the most lucrative comp packages to MBAs. The median PE starting base salary this year was $170,000. At Tuck, for example, only 4% of this year's class went into private equity and the base for those PE jobs was just $120,000.




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