Where MBA Career Pay Totals $3 Million-Plus

Brand has real value in the business school world. If you go to a top ten business school, chances are you’ll outearn MBAs from lower-ranked schools when you graduate but also throughout your career.

That’s the conclusion from the latest study of career pay by Payscale, a data-crunching compensation firm. The numbers were published earlier this week on June 12 by Bloomberg Businessweek which found that the short- and long-term value of the MBA degree closely correlates to rank.

Of the 10 schools with the highest career pay, eight are top-10 schools in BusinessWeek’s latest ranking, while  all but five of the 30 schools with the highest career pay are among the top 30 schools. Only MBAs from eight schools–all ranked within the top ten on some if not all major rankings–earned more than $3 million in cash and bonus during their professional careers, according to the data.


Not surprisingly, Harvard Business School assumed the top spot in the ranking, with 20-year pay of $3,639,643, followed by the University of Pennsylvania’s Wharton School at $3,460,707 and Stanford Graduate School of Business at $3,432,013 (see table below).

These numbers, especially for the big brand schools, are highly conservative estimates. Payscale, for example, concluded that Harvard MBAs are making only $136,000 five years after graduation. The latest number published by Harvard’s own career management office show the median base salary alone last year was $120,000, with nearly seven of every ten graduates earning a median signing bonus of $20,000 and nearly one in five earning guaranteed year-end bonuses of $35,000.

The upshot: the median salary and bonus for Harvard MBAs in year one last year was close to $140,000, not including the year-end bonuses. That’s already $6,000 more than Payscale is reporting for Harvard MBAs five years after graduation. By significantly under reporting in the earlier years, it’s highly likely that the “career estimate” of $3.6 million in median compensation is a fraction of what the typical Harvard MBA will earn in a lifetime.


Consider the data from Harvard’s Class of 1986 which held its 25th alumni reunion last year. In a reunion survey not intended for publication (See “25 Years Later: A Revealing Class Portrait Of The Lives of Harvard MBAs”), MBAs in the class reported their median income at $350,000 a year–way above the Payscale calculation of $224,000 at the 20-year mark. More interestingly, one in four members of the class said they were making a million or more annually. And 25 years after receiving their MBAs, class members reported that their median personal net worth was $6 million–considerably more than the $3.6 million in total career earnings reported by Payscale. Assuming that these Harvard MBAs have at least another 12 to 15 productive years of work ahead of them, it’s likely they would exceed the entire career estimate by Payscale in their final stretch alone.

Similar issues exist throughout the data reported by Payscale, particularly when applied to the top schools. At Dartmouth College’s Tuck School, for example, Payscale reported that salary and bonus five years after graduation was just $128,000. But the school’s official numbers show that the median total pay package for a Class of 2011 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.”

The reason for the discrepancy has to do with the way Payscale calculates its estimates. The pay reports the firm uses are “for groups of people who graduated from the same school at various times, not for one group of people who reported their pay throughout their careers.” The estimates, moreover, do not include the value of stock or stock options or the value of tuition reimbursement, which can make up a big chunk of MBA pay in the short- and the long-term. Stock gains alone could easily double the salary-and-bonus estimates.

It’s also possible that the most highly compensation alums are less likely to report their income to Payscale which makes these estimates based on what it says is a database of 100,000 MBA graduates.


Obviously, career choice and geography also weigh heavily in these estimates. A Harvard MBA who gained a job in hedge funds last year earned median base salary of $150,000 to start, with 23% of them reporting other guaranteed compensation of $150,000 in year one. On the other hand, Harvard MBAs who took jobs with the government or with a non-profit organization last year earned median base salary of $90,000, with no upside bonus.

Graduates of the 10 programs with the highest earnings took home nearly $3.2 million apiece, or $159,122 a year, an increase of 3.6% from a year earlier. The remaining 47 schools averaged $2.3 million, or $114,724 a year, virtually no change from last year.

“The effects of the Great Recession on the labor market for MBAs can still be felt today, a full three years after the official end of the recession,” Katie Bardaro, analytics manager at PayScale, told BusinessWeek. “The only MBAs who appear to be escaping these stagnant wages are graduates from top-ranked programs.”

Schools with the lowest starting salaries typically had the biggest increases. Payscale said MBAs from the University of Georgia’s Terry College of Business showed the biggest gain—a whopping 174%, to $139,000 at the 20-year mark. MIT’s Sloan School MBAs had the smallest, at 4%, to $169,000.


“The MIT numbers highlight one of the study’s inherent limitations,” BusinessWeek acknowledged. “Pay data for smaller schools such as MIT may be based on fewer than 50 reports and may not accurately reflect pay for the entire class.”

(See following page for table of the top schools in the survey.)

  • bob

    Somebody is from Europe. lol

  • This is US centric propaganda. It is very easy to present statistically accurate data and yet highly embellish reality. How about mega earnings in Chinese business life, or the less glamorous part of Europe? The US still living on its 20-th century image of a bygone era. I would advise youngsters to go for a 5 year double major masters program in an area that combines some exact science (engineering, applied maths, programming etc) with foreign languages and then go and work in business. You need more than a liberal arts program with some over-hyped MBA costing a fortune.If you can learn Chinese and forget titanic America which has already hit the iceberg.

  • Math cruncher

    Actually, its $85/hour. That makes it sound a whole lot better. But that is, if you are really working 40-hour weeks.

  • Math cruncher

    I’m assuming that is pre-tax? Is it adjusted for inflation in any way? Just trying to understand what that $3.6 million means in terms of net worth. I guess it implies that the average harvard grad is able to set aside $1.8 million in after tax income and of that amount, maybe the real savings are about $1 million?

    More importantly, if you believe its pre-tax, then a 20-year period implies 20 years of 40 hour weeks and 200 work days. That means, only $22/hour. Sounds tough!! 

  • Thomgood

    Those are some crazy low numbers.  Last year the average base salary coming out of Kelley was $96k (the median is within a grand or two of that), but the data above says that at the 5 year mark the average is $80k? Yea, no.

  • llavelle

    I think I need to clarify something here. The data presented in the BW report is NOT the pay for 5, 10, 20 years after graduation. It’s the pay for someone who has an MBA plus 5, 10, 20 years total experience INCLUDING pre-MBA experience. So for the vast majority of schools, the pay figure that appears in the “5 years experience” bucket is, more or less what people who got their MBAs after 4-5 years in the workforce would be paid. Those numbers do, in fact, line up nicely with what’s reported by the schools themselves. There are differences in how PayScale and the schools calculate pay (and how the survey respondents in John’s terrific “25 Years Later” piece reported income) so we shouldn’t expect these figures to line up perfectly. Hope that clarifies some things.
    Louis Lavelle
    Associate Editor
    Bloomberg Businessweek

  • MBA4me

    This data smells funny.  How can it be that T15 schools with documented average 1st year starting salaries of $105K+ drop by the 5 yr mark?  This doesn’t make sense intuitively or mathematically, nor does it line up with Forbes 5 yr average incomes which are about $180K for T15 schools…

  • Target_MBA_Top5

    Oooops …… That last line!!! 🙁

    I meant “Thank you and keep up the yeoman service”. ……… 🙂

  • Target_MBA_Top5

    I agree with you Bryne that this report does seem to have a lot of lacunae. It says that the Booth grads earn an average pay of ~115k, five years after grad whereas your report on “the best schools to get a job” clearly shows the starting average START pay or the class of 2011 as about ~126k! …. And with the limited knowledge I have of Booth, I think yours is very much closer to the actual one, albeit a tad lower. Any reason why Booth has been placed at a lowly eighth?

    So, the more imp question – When can we have you doing your number-crunching and get a similar article on the table??

    And btw, I love your articles Byrne!!!! They really did help me immensely when I was choosing between the schools I wanted to get in for my MBA. Thank you or eep up the yeoman service

  • Brainie

    Maybe you don’t have brain cells. I was commenting on the fact that the article fixated on MIT while Tuck and Yale have much smaller class sizes.

    Critical reasoning is not just reflected in the GMAT score. But if you are so curious,
    I scored 44 V.

  • Guest

    Do you have brain cells? The article clearly states “smaller schools such as MIT,” likely referring to schools like Tuck and Yale. Furthermore, the data is based on the number of salary reports, not the size of the school. I bet you did/will do well on the critical reasoning section of the GMAT Brainie…

  • Sgz2001

    Dear Mr. Byrne, how does this look in european universities? IMD, graduates could expect to be within those firts 8 universities?
    Thank you.

  • Brainie

    BusinessWeek acknowledgement about MIT is bullshit. Tuck is smaller and Yale is even smaller. Plus, Yale sends lots of grads to non-profit/government sectors where $ is much less. Do people have brain cells?!

  • Karthik

    Thank you so much for your reply John! I had also previously asked my friends who were interested in a business education to look through your site thoroughly for the best info and they were very glad on the amount of information present in your site! Keep up the good work John 🙂 and am waiting for more news from you 🙂

  • BoothFanBoy

    Good to know what Booth Vs Wharton is still top of the stack for you John. Eagerly waiting for it.

  • highwyre237

    If you’re planning on diving into Duke data, I feel a Duke vs Ross smackdown would be useful too!

    Cant wait to see Duke vs Darden, thanks in advance!

  • JohnAByrne

    Unfortunately, it takes a full three days of work to do a single smackdown report. And that’s when it’s easy to schedule interviews and the schools do a good job of reporting their own data. There will be a lot more smackdowns in the future, but I’m aiming for the schools that get the most applicants, largely because those articles will be of greater use to our readers. I still need to do many obvious ones, such as Booth vs. Wharton and Duke vs. Darden. So it will be quite a long time before I can get to something like ISB vs. HKUST. Off the top of my head, however, I would say that HKUST has a more diverse student and alumni population that would make the MBA experience there more valuable in the short- and the long-term.

  • Karthik

    This was addressed to @jbyrne:twitter  🙂

  • Karthik

          When can we expect a B-school smackdown between ISB and HKUST as well as Insead and LBS.  I’m one of the many thousand ppl waiting eagerly to hear it from you 🙂  

  • highwyre237

    I came across this yesterday and was somewhat under whelmed by the numbers reported.  Thanks for using your critical eye and putting this data in perspective.

  • That´s a great summar to us. Thanks a lot for these details and insights on the salary.