Tuck MBA Reports $863K Pay Package

by John A. Byrne on

A Dartmouth College Tuck MBA landed a private equity job with a total compensation package last year of $863,000, according to the school’s recently published employment statistics.

While the Tuck MBA didn’t top the highest starting salary reported for a graduating MBA last year—a whopping $552,681-a-year job captured by an MBA from the London Business School—the Tuckie easily captured the highest total compensation package. The Tuck takeaway beats out a Stanford MBA in the Class of 2011 who gained a job with a total comp package estimated at $675,000, including a half-million-dollar guaranteed bonus from a hedge fund.

Jonathan Masland, director of career development, said the big number was a new record for Tuck and captured by a Tuck grad who did an independent job search. “That is the largest number I’ve seen,” he said. “In private equity, there is a performance structure that can be a lot. A really top MBA based on professional background would participate in the carried interest which can be substantial. That is part of typical private equity compensation.”

Unlike other MBA professions where there are a large number of hires at fairly standard pay levels, private equity firms and hedge funds tend to hire only one or two grads and structure compensation offers on a more individualized basis. “When it is a one-off job and maybe it’s someone you know very well, the likelihood that the numbers would be much higher is greater,” explained Penny Paquette, Tuck’s assistant dean for strategic initiatives. “There aren’t that many people in most private equity firms.”

TUCK “AVERAGE” TOTAL PAY PACKAGE: A STUNNING $180,000

The school reported some monster numbers for its graduating class last year. The median total pay package for a graduate was $169,000, while the mean was $180,000. Those sums include annual base salary, signing and performance bonuses, relocation expenses, tuition reimbursement, and “other compensation.”

“In general, we’re seeing more high quality MBA jobs,” added Masland. “And we’re continuing to see the same trend for the ’12 class. We’re  a nudge above where we were last year in terms of the percentage of students who already have job offers.

“The two things that struck me with our ’11 class is 1) the fact that consulting has returned to pre-recession levels. About a third of the class joined this profession out of school. The other thing was the compensation bump of about 7% for both base and overall. I think they are kind of related. Maybe things are a little better in the economy than what the news has presented.”

Often times, it’s a minority of graduating MBAs who land signing bonuses and performance bonuses. But Tuck reported that 86% of the Class of 2011 were given signing bonuses by their employers, while 91% reported receiving performance bonuses. The median signing bonus was $25,000, the same amount as the median performance bonus.

Private equity and venture capital paid the highest median salaries to the class: $135,000, though the range varied between a low of $110,000 and a $315,000 maximum to a Tuck grad other than the one who landed the huge compensation package. About 5% of the class went into PE and VC last year–still off from the peak years in 2006-2007 when nearly 10% of the Tuck class went into those fields, including hedge funds. “It dropped to two or three percent but it is now rebounding,” said Masland. “Most of it is in private equity and buyouts, not venture capital.”

After PE, consulting paid the next highest salaries: a median of $125,000, with the lowest reported salary at $85,000 and the high at $145,000, according to the school (see table on following page).

Not all business schools report total compensation numbers, but Tuck believes it’s worthwhile to get that information into the marketplace. “We really think it is something that is relevant to people and it is good data so we report it,” said Paquette.  “For us, one of the reasons we wanted to put it out there is that Tuck grads do go into private equity and some people don’t know that. “So we wanted to get that out there.”

Tuck, for example, boasts a Center for Private Equity and Entrepreneurship and recently added a new hedge fund course to its elective curriculum.

HIGHEST BASE SALARIES FOR THE CLASS OF 2011

HIghest Reported 2011 Base Salaries School Job Location
$552,681 London Corporate Australia
$375,000 Wharton Unknown Unknown
$315,000 Dartmouth (Tuck) Private Equity Boston
$300,000 Stanford General Management U.S.
$300,000 Chicago (Booth) Private Equity NA
$300,000 Columbia Hedge Fund New York
$250,000 Kellogg Private Equity NA
$250,000 Duke (Fuqua) Investment Banking Northeast
$215,000 Yale Manufacturing Northeast
$200,000* Harvard Unknown New England
$166,800 MIT (Sloan) Consulting Europe
$160,000 Virginia (Darden) Law Mid-Atlantic

SOURCE: Business school employment reports. An asterisk for Harvard indicates that the school only releases compensation figures at the 75th

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  • http://poetsandquants.com/members/joshua/ Joshua Stanley

    Its mind-boggling only when we don’t know about the previous experience of the graduate..He/She could not be simply a graduate,rather a well-experienced professional who already achieved high in his/her career already…

  • Mario

    John,

    If I am right, I believe you like Tuck more than any other school ! I can see this in all your writings about this unique school ;)

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Mario,

    I wouldn’t say I like Tuck more than any other school. I do think it is under-appreciated and underrated as one of the world’s best schools. But I also think that about a number of other schools, including Darden, Emory and Washington University.

    If I were in the age group to get an MBA, my own most important criteria would be 1) The overall quality of the teaching (I don’t want to sit in a classroom with dud professors who have their heads buried in research that doesn’t matter to the real world. Sadly, too many business schools believe in this model.); 2) A highly collaborative culture that extends itself non merely on campus during my two-year stint but long after through a vibrant and close-knit alumni network; 3) I prefer small and intimate classes with lots of interaction with the professors who are accessible to students, invite them to their homes, and are eager to help with job search and independent study. That doesn’t mean I would discount the full-scale, full-scope MBA factories, but for me, I think there is more magic when you know everyone in the place and they know you.

  • Mario

    John,

    many thanks for that super advice (dear applicant: keep in mind that advice comes from someone who has been evaluating schools for 24 years ;) )
    that goes perfectly to TWO top business schools, Tuck and IMD..I personally impressed by the strong bond and loyalty of Tuckies..and I was taken by the IMD assessment day when they conduct the interviews..it tells how much efforts they put in selecting their candidates..
    Best of the best..

  • jay

    I’m curious if the 8% of students receiving tuition reimbursement were sponsored by their employers before attending Tuck or if they were able to secure reimbursement as part of their post grad pay package.

  • Rehman

    John,

    do you mean Washington University at St Louis or Washington University in Seattle ?

  • Alois de Novo

    Having attended one of the “full-scale, full-scope MBA factories,” I completely share your favorable view of Tuck. And that’s what I tell my friends.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Rehman,

    Wash U in St. Louis.

  • Healthy Suspicion

    Does anybody ever get suspicious about these employment reports? The data is self-reported from the school and its students. Those two groups benefit directly when they have rosy employment numbers since it helps drive school prestige.

    What’s to stop some people with a lot of school pride from fudging their salary numbers? Or, if they have a low offer or none at all, not submitting their personal data to the school to avoid dragging down the average and percentage of people with offers?

    And please don’t think I’m singling out any school. Just seems like a system without any checks and balances.

  • Furious styles

    I think is only misleading to look at the top salary and think of it as metrics for the school. The median or mean I think are more relevant and unlikely to have errors.

  • Apples to…

    It seems disingenuous to include carried interest in the total comp package that is reported in the employment report. This figure is incredibly variable and will be realized over a 7 year+ period based on the ultimate performance of the fund.

    I know kids who have graduated from HBS/Stanford with carried interest in their new funds that EASILY exceed $1M if not more, though no one would include that when describing their post-MBA annual comp.

    The student from Tuck will probably make $400K in comp and has carried interest worth $400K+. Still impressive, but remember the carried interest will only be paid when based on realized gains.

  • lalu

    Wash U !!! U must be kidding me !! its a sham , just in US News by gaming the rankings!! They stink, from my experieice.

  • Puccini

    Suspicious, you are right to be so, however, there is a watch-dog group that looks over all the employment data reported by the schools. That is the MBA Career Services Council. That group has been working for over 12 years to perfect standards for reporting which standards apply to every school that reports. No, some schools may be pressured by their Dean to fudge numbers, and if that happens, the council will call them out on it. But for the most part – and having worked at a couple of MBA programs and been on the MBA CSC – I can state that the figures are usually correct (and I say “usually” just to account for human error, not for malicious intentions).

  • bud

    Another relatively good and underrated b-school in my opinion is Indiana-Kelley. It is ranked around 19-27 in the US by Forbes, US News and BW, strong in marketing, and I saw here http://www.aringo.com/Indiana_MBA.htm that the tuition is relatively low and they are somewhat generous with financial aid (95% receiving financial aid). What do you think about the Kelley MBA program?

  • John Gurskey

    The most recent USN&WR rankings are a far better guide to what most students should expect as average starting salary and bonus. 

  • ayo

    I think you work for the Kelley program.

  • Lara

    INSEAD report a salary of 250000 euro from the class of 2011, which is about 351000 USD. where is it in this list???!!!!

  • Palimo

    absolutely agree. Kelley is one of the best worldwide in consumer goods, sales, and marketing. P&G, Unilever, GM, and others like it very much. and Yes, less expensive than other top schools.

  • rubicx

    One of the reasons those schools have such solid reputations is that they have integrity, and because they have integrity, they are honest, and because they are honest, they report numbers without fudging. At the same time, read between the lines. Those high compensation packages don’t come just because of the MBA, but rather because of the total experience of the student.

  • rubicx

    They weren’t evaluating the easy piecey lemon squeezy business schools.

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