In the grand scheme of things, the MBA summer internship results in little more than chump change for most students. The 10-week-long stint typically earns an MBA candidate between $15,000 and $20,000.
More valuable is the experience of working in a new industry or a different company. It’s often a chance for a person to use the MBA to transition to something new. Increasingly, it’s a real tryout for a job. Many MBAs receive offers of employment after their summer internships which can take a lot of stress and anxiety out of a job search.
How much an MBA makes can also signal what kind of value companies place on a specific business school brand. That’s why our study of internship pay is especially surprising. The highest paid interns, it turns out, aren’t at Stanford. Harvard and Wharton whose MBAs commonly land the highest starting base salaries. Instead, the MBAs at Columbia Business School, the University of Chicago’s Booth School of Business and New York University’s Stern School come out on top of this analysis.
WHY STANFORD IS 17TH IN MBA INTERN PAY
Perhaps the biggest single surprise is that the median intern pay for Stanford MBAs puts the school in 17th place, behind Indiana, Michigan, and Virginia. Stanford students reported median weekly intern pay of only $1,501 versus Columbia’s $2,000, Chicago’s $1,944, and NYU’s $1,923. That’s especially unexpected because when students graduate from Stanford, they are the highest paid MBAs in the world, earning $125,000 starting salaries (Stanford MBAs Snag Highest Starting Salaries).
Why such a significant disparity between Stanford and these other schools? One word explains the difference: the Internet. Some 18% of Stanford MBA students did their internships at Internet or e-commerce companies, which pay their interns significantly less than consulting companies and investment banks. That is five times the percentage at Columbia Business School, where only 3.7% of the MBAs did summer stints at Internet and e-commerce plays.
Instead, 51% of Columbia students landed internships in finance (versus 32% at Stanford), while 14.6% were interns at consulting companies (versus 13% at Stanford). The top companies that hire Columbia MBA students for summer internships: McKinsey (25 hires this summer), Goldman Sachs (24), Credit Suisse (16), J.P. Morgan (14), Morgan Stanley (14), and Deutsche Bank (13).
The difference between what these firms pay interns and what internet and tech startups pay is shocking high. Stanford MBAs who took on consulting internships, for example, were paid median monthly salaries of $10,500, 73% more than $6,062 paid to internet interns. Those who spent last summer in finance positions earned $8,333, 37% more than internet firms paid. Then, there’s the horde of Stanford MBAs who went the venture capital route this past summer. Some 6% of the class worked for a venture capital firm, which paid even less than the internet companies. The median monthly salary paid Stanford MBAs in VC was only $6,000. Another 6% took non-profit assignments last summer (versus 2.3% at Columbia) which paid even less: $5,196 a month.
HOW MUCH MBA INTERNS ARE PAID IS LARGELY A FUNCTION OF WHAT INDUSTRY THEY WORK IN
So clearly, how much interning MBA students get is not merely a function of where they go to school. It’s mainly a function of what industry and company they spend their summer with. At the University of Virginia’s Darden School, for example. students who ventured into the consulting business also got the most pay: $2,325 on average a week. The least: Not surprisingly, it’s the not-for-profit or education sector which paid Darden interns just $922 a week.
After consulting, investment banking paid the most ($1,921), other financial service jobs were next ($1,712), then manufacturing ($1,671), and investment management ($1,637). If you did a summer stint in retail, it paid only $1,442 a week. Media and entertainment internships paid just $1,370 a week.
Most schools say that roughly 5% of their graduates do internships without pay. Also bear in mind that these are median numbers. The range can vary across the lot. At MIT Sloan last summer, the median monthly base salary for an intern was $6,800, but the range was between $250 a month and $13,900 a month.
MBA INTERNS AT THREE OF THE TOP 25 SCHOOLS WERE PAID LESS THIS YEAR THAN LAST
Some 21 of the 25 leading business schools in the U.S. reported that internship pay went up for their MBAs this year. Cornell’s Johnson School said weekly median pay to its MBA students jumped 16.6% to $1,615 this year. It was the largest reported increase of any school. The Unversity of Michigan’s Ross School and Georgetown University’s McDonough School both reported rises of about 14%, while Northwestern’s Kellogg School of Management and Notre Dame’s Mendoza School reported 12%-plus hikes.
Only three of the top 25 U.S. business schools actually reported declines in the median weekly pay for internships this year: Stanford said intern pay to its MBAs fell 7.6% to $1,501 a week; Yale reported a 3.2% decline to $1,500 a week, and Vanderbilt’s Owen School reported a slight 1.3% drop to $1,333 a week.