If you still need evidence that a highly ranked MBA degree is worth the investment, look no further than this year’s starting median salaries. While it’s true that in most cases year-over-year starting salaries for MBAs have remained flat or shown meager growth, the impact of the degree is that it significantly boosts your pre-MBA pay.
This year’s MBAs reporting the largest percentage increases over their pre-MBA salaries graduated from Michigan State’s Broad School (a whopping 268.6% increase from what they had earned before getting the degree), Notre Dame’s Mendoza School (up 148.8%), the University of Minnesota’s Carlson School (up 132.2%), the University of North Carolina’s Kenan-Flagler Business School (up 122.2%), and Indiana University’s Kelley School (up 119.6%). And these numbers exclude starting bonuses and other bennies that are often handed out to MBAs when hired.
MBA GRADUATES FROM STANFORD, HARVARD & WHARTON REPORTED THE HIGHEST MEDIAN SALARIES
While graduates of Stanford, Harvard, and Wharton earned the highest median salaries, their increases over pre-MBA pay were much smaller because they entered their MBA programs earning significantly more money–a sign of the high caliber of the incoming students. At Stanford, where grads landed jobs with median salaries of $125,000, the highest of any school, MBAs experienced a 38.9% increase over their pre-MBA pay. At both Harvard and Wharton, where median salaries were $120,000 this year, the increase was 33.3%–the lowest percentage rise at any of 30 top U.S. schools.
Not bad, of course. Just not as eye-popping as some other business schools that are enrolling students who had earned less. That occurs because MBA starting salaries are, by and large, similar across most of the top schools, even though students entering lower ranked schools typically make less money. Moreover, graduates from schools with the best brands usually receive greater non-salary compensation. At Harvard Business School, for instance, three of every four graduates this year reported 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 (base, sign-on bonus and guaranteed comp) earned first-year median pay of $170,230.
Some 17 schools reported six-figure median salary numbers for their graduates, ranging from Stanford’s high of $125,000 to seven schools whose MBAs started at $100,000. They include Cornell University’s Johnson School, Yale’s School of Management, the University of Southern California’s Marshall School, Emory’s Goizueta School, Texas at Austin McCombs School, the Kenan-Flagler School at the University of North Carolina, and New York University’s Stern School.
The median salary numbers, reported by the business schools to Bloomberg BusinessWeek, are for BW’s top 30 U.S. schools. So it’s likely that there are other schools that have similar returns for their MBA graduates. The magazine did not report the statistics it has gathered for schools outside the U.S. or for other schools that are not ranked among its top 30 list.
YEAR-OVER-YEAR STARTING SALARIES WERE GENERALLY FLAT DESPITE THE HEFTY INCREASES OVER PRE-MBA PAY
BusinessWeek reported that the inflation-adjusted growth rate for the median salary of each school’s graduates “is not rosy. At about a third of the 30 to-ranked schools, the median growth rate was negative, meaning salaries have either fallen, or budged by less than one percent, over the last three years.” Year-over-year median salaries remained flat at Stanford, Harvard, Wharton, Columbia, and Yale’s School of Management, among many other schools.
A few schools nicely bucked this trend, reporting that their MBAs saw increases in salary over last year. The University of Chicago Booth School, for example, said its graduates landed median salaries of $115,000 this year, up from $107,000 last year and $102,000 in 2010. Duke University’s Fuqua School reported that its 2012 MBAs had median starting salaries of $110,000, up from $101,400 last year and $100,000 in 2010.
SOME 22 OF 30 SCHOOLS REPORTED AT LEAST A 50% INCREASE IN PRE-MBA PAY FOR THEIR GRADUATES
Even so, the increases over pre-MBA salary remain impressive–and at many schools are astonishing given the still uncertain economy in the U.S. At seven of the 30 schools, graduates either doubled or more than doubled their pre-MBA pay. At 22 of the 30 schools, graduates reported at least a 50% increase in starting pay–and again these figures do not include signing bonuses, guaranteed year-end bonuses, or tuition reimbursements.
(See following page for a table of the median salaries and post-MBA pay hikes for the 30 top U.S. schools)