What Harvard MBAs Made This Year

by John A. Byrne on

A modest economic recovery? Don’t tell that to this year’s graduating MBAs from the Harvard Business School.

For the Class of 2012, median base salaries were $125,000–a slight $5,000 bump over last year–with three of every four graduates getting a median signing bonus of $20,000 and one in five (21%) reporting median “other guaranteed compensation” of $25,230. Harvard MBAs lucky enough to collect all three landed first-year median pay of $170,230.

Yet, even that sum could be highly conservative because Harvard’s numbers–released last week on its website–do not include such things as performance bonuses, reimbursements, profit sharing, 401k matching programs, stock and/or stock options. And the compensation, interestingly enough, is going to MBA graduates with less work experience. The average months of work experience for the Class of 2012 was 44 months, ten months shy of the 54 month average only four years earlier in 2008. Typically, the more post-college work experience a graduate has on the resume, the more that graduate is paid.

Harvard’s latest employment stats show that MBA students who ventured into some of the hottest fields experienced healthy increases in starting salaries. The median starting salary for a Harvard MBA entering the consulting business was $135,000 this year, with a $20,000 signing bonus. That’s a $10,000 increase in base pay over last year when Harvard MBAs reported median salaries of $125,000 in consulting. Harvard said that 94% of its MBAs who went into consulting got a signing bonus, while another 18% received median other guaranteed compensation of $20,000.

Only two other industries paid more to Harvard MBAs this year: hedge funds and private equity. The median salary for a grad landing a hedge fund job was $142,500, with a median signing bonus of $27,500. Even more alluring, however, is the “median other guaranteed compensation,” which Harvard reported was $150,000. These jobs, of course, are generally hard to get because there are fewer of them. and they tend to recruit only students with previous experience in the field. The school said only 5% of the Class of 2012 went into hedge funds.

FOR AT LEAST 40 HARVARD MBAS, THE MEDIAN PAY PACKAGE HIT $330,000

Private equity, where some 15% of the class landed, was the only other field to top consulting in pay. The median pay for a PE job this year was even better than hedge fund money–$150,000, up $15,000 over last year’s base of $135,000. But that’s not all. PE grads reported median signing bonuses of $30,000. Other guaranteed compensation, reported by a third of the grads going into private equity, was $150,000. So for about 40 MBAs in Harvard’s Class of 2012 the median first-year compensation was at least $330,000. A year earlier, private equity and leveraged buyouts snared 14% of the Harvard class.

MBAs who were lucky enough to land jobs in private equity, hedge funds, and investment management were the most likely to win the highest first-year potential windfall from their degrees (see table below). Besides the median $330,000 for some who went into PE, the first-year potential was a median $320,100 in hedge funds and $201,500 in investment management.

The highest salary reported by Harvard this year was a base salary of $200,000 for a private equity job. HBS, however, never reports the full range of salaries but rather the salary at the 25th and 75th percentiles. The $200,000 payday was for the 75th percentile for a graduate who entered private equity.

Harvard is among the first business schools in the U.S. to report the employment statistics for its Class of 2012 which graduated in late May.  The school said its self-reported student numbers are based on a sample of the class at graduation and “is subject to change until finalized in the fall.” The data for other business schools tends to trickle out after September.

Kristen Fitzpatrick, senior director of MBA Career and Professional Development, told Poets&Quants, that this preliminary data is based on 491 students reporting back to the school. “It’s still a number in flux,” she says. Harvard plans to release more complete information on the class in October that will reflect results three months after graduation. Those statistics are more likely to show the impact of job searches by individual students seeking opportunities that tend to fall outside the MBA mainstream. “The self-directed search story will be there when the three-month data comes out,” adds Fitzpatrick. “What the data also doesn’t show is that they seem pretty happy with their choices,” she says. “They have found the right path, not just any path. They are getting the careers they want. Not just a career.”

Based on the preliminary data, a near-record 29% of Harvard’s Class of 2012 headed into the still booming consulting industry, according to the school’s employment statistics. That’s a full five percentage points higher than the year-earlier class of Harvard MBAs and nearly matches the record 30% of graduates who chose consulting in 2003.

As of graduation on May 24th, Harvard said that 76% of class was seeking a position. Of those students, 90% had an offer by graduation day, and 74% had accepted an offer by graduation. For the 24% not seeking, the majority are either sponsored by an organization, starting a business or continuing their education.

Grads entering the financial services industry, on the other hand, were down four percentage points to 35% from 39% for the Class of 2011. Ever since 2008, when 45% of Harvard’s graduating class went into finance, the numbers have been declining, largely the result of cutbacks in staff on Wall Street and other large financial institutions. The biggest hit was in investment management jobs, with attracted only 4% of this year’s class, versus 12% of the Class of 2011. Investment banking jobs for Harvard MBAs fell to 7%, from 10% a year earlier.

Not all finance jobs were down. At 15% of the entire class, Harvard MBAs who took private equity jobs hit a new record. Last year, 14% of the Class of 2011 headed for jobs in PE, up from 9% a year earlier and the highest since 2006 when PE and LBO jobs were taken by 13% of the class.

HBS Class of 2012 Highest Paying Industry Jobs

Notes: * Total first-year potential includes base, a sign-on bonus, and guaranteed other compensation. Not all grads receive bonuses. Even so, this number is understated because it fails to include performance bonuses, reimbursements of tuition and other fees, profit sharing, 401K matching programs, and stock or stock options.Source: Harvard Business School employment statistics, Class of 2012

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  • lakeshow

    Hey there! first of all, I love the site and have been a long time reader.

    Now to my request: Is it possible to do a similar breakdown for the GSB. I’d love to see what I can (potentially) look forward to. Thanks!

  • JohnAByrne

    Thanks. HBS is always the first school out of the gate with admissions and career placement data. As soon as Stanford, Wharton, et al release their numbers, we’ll have stories up on the site with comparative reporting and analysis.

  • lakeshow

    Wow that was a fast response. thanks a ton! You guys really have an amazing thing here with the site, and I’d be lying if I said it wasn’t one of the sites I was visiting when going through the application process.

  • http://www.mbaover30.com/ MBA Over 30

    Hey John, I sent you a PM when you get a chance. I hope that all is well!

  • Dreamer

    One must always remember that even at HBS (or GSB), unless you had a PE/HF job before Bschool you wont get one of them afterwards.

  • Towers x 1000

    John, love the website.
    Could you -or another reader- please clarify what is meant by “including real estate” under the Services category. Is this referring to things like general real estate brokerage -leasing, sales, etc.- and mortgage lenders/originators? Would something like real estate development (think Related Co. Hines, TIshman Speyer or similar) be in this same category, or would that fall more under “Investments”?
    Thanks!

  • JohnAByrne

    Very good point and one that we’ve made before. People who go into private equity or hedge funds almost always have had experience in those industries to begin with. That is a very important reason why the comp is so high.

  • Parimas

    Dear John, Duke already published their statistics.. ;) http://www.fuqua.duke.edu/documents/mba_recruiting/DukeMBAEmploymentReport11-12

  • Dreamer

    Yep, that is why I love this site. As data 16% of the 2014 class came from private equity and I think it was 18% in 2012 so 2% loss. My buddy from Silver Lake Partnerts had to settle for a corp dev job in the silicon valley cause PE comp is really high at HBS

  • DualDegree

    Would of been nice to see the salaries of the few students that get dual degrees (JD and MD) with their MBA.

  • JM

    John, can you break down the salary data into how many $ per hour a candidate can expect (per year or week)? Because these numbers can be completely deceiving when you could be working either 80 hour weeks or 50 hour week on average. It would shed some light as to what kind of work/life balance these recent MBA’s can be expecting. Your insight and opinions would be appreciated.

  • Go Cardinal

    Although generally a true statement, I know for a fact that several prior military students from HBS and Stanford GSB have made the jump to post-MBA PE during recent years (multiple military students from HBS class of 2012). I assume others have made the jump from non-PE/HF industries. See data below:

    http://militarytobusiness.blogspot.com/2012/08/where-are-hbs-2012-military-veterans.html

  • Youyou

    I think your question does not make much sense as what you expect from PE and Investment banks are more hours to get more $

  • Moe A

    Can someone elaborate on “health services” as a job? Does that mean a pharma company or what exactly?

  • SVT

    Hospital Management companies, HMO’s, Medical devices & delivery.

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