Average Pay & Bonus At Top 50 Business Schools

money, salary, pay

Are Harvard and Stanford MBAs no longer the highest paid business graduates on the planet?

For years, it was pretty much a given that the most lucratively rewarded MBAs in the world strode off the campuses of the Harvard Business School and the Stanford Graduate School of Business. Yet, for the first time ever last year, the average salary and bonus paid to HBS and Stanford grads was below the sums landed by rival MBAs at both the University of Pennsylvania’s Wharton School and Dartmouth College’s Tuck School of Business.

For Harvard and Stanford MBAs, in fact, starting salaries and bonuses were the lowest they have been in the past three years. HBS grads landed jobs paying $138,346, down from $142,501 in 2012, while Stanford MBAs took jobs that on average paid $137,525, down from $140,459.

In contrast, Wharton grads were paid a record $141,243 last year, nearly $4,000 more than Stanford MBAs. Dartmouth Tuck grads left the school’s Hanover, New Hampshire campus with average salary and bonus of $139,036—more than $1,500 extra.

Even worse, perhaps, average salaries and bonuses for the graduates of what are generally considered the two best business schools in the world were significantly lower than they were five years ago in 2008.


Though the Great Recession was already underway that year, most of the job offers were made to graduates before the market went bust so they reflected the pre-crash froth of an economy in a bubble. In 2008, Harvard MBAs reported record salary and bonus averaging $144,261. Last year, a full five years later, the pay was nearly $6,000 less. It’s a similar story for Stanford MBAs. The Class of 2008 received average salary and bonus of $140,771, also a record, but more than $3,000 less in 2013.

Truth be told, Harvard and Stanford pay hit an artificial ceiling in 2008. The reset of the economy has essentially reset those pay levels. After all, in 2008 average salary and bonus at HBS went from $135,630 in 2007 to $144,261–a hefty jump in a single year.  At Stanford, it went from $134,654 to that $140,771.

The latest compensation numbers are reported by the schools to U.S. News & World Report for its ranking of the best full-time MBA programs published earlier this week. Harvard and Stanford aren’t the only outliers. In fact, starting salary and bonus for MBAs fell at 12 of the Top 50 business schools.


But how is it possible that HBS and Stanford no longer rule the pay roost? “It’s simply the industry mix,” explains Maeve Richard,  assistant dean and director of Stanford’s Career Management Center. Where Stanford MBAs take their careers “has fluctuated significantly as students have gravitated from finance to technology over the last six years. Since 2007, the percent of students going into finance has gone from 38% to 26% (2013). That has affected the calculation of overall compensation since the cash bonus component tends to be high in finance.”

Many of the tech startups that have been successful in recruiting more of Stanford’s graduating class keep base salaries and sign-on bonuses low, preferring to hand out stock and other back-end bonuses not calculated in more traditional salary-and-bonus metrics.

“Over the same period (from 2007 to 2013), the percent of students going into technology has risen significantly from 12% in 2007 to 32% in the last graduating class. It’s important to note that the standards used by business schools and U.S. News for calculating compensation do not capture equity gains such as stock options, which is a potentially significant portion of compensation for those in the tech sector. “

  • Joshua

    You gotta take more into play with your equation.

    To get a more true answer, you need to factor a few other items into your math:

    – Tax rate differences (there’s a 8% difference for marrieds filing between up to $148k and those above $226k)

    – Opportunity cost (it’s not just $-100k for two years – there are two years you’re not earning)

    But the biggest issue is the last sentence – “If you can make risk free 8% real rate of return…”

    Loading up on $100k in student loan debt isn’t risk free my friend. And having a degree of any kind, while certainly valuable, is far from a risk-free guarantee of earnings for your 30 year career.

  • NPVme

    *It’s also not including the network you would have access to upon graduation to help ensure you keep a job for 30 years.

  • NPVme

    This is why you need an MBA. Calculate the NPV of these two cash flows:
    1) Normal, no MBA. Starting salary at age 30: $100k (pretty good for anyone not in finance). Use 4% raise every year (probably not realistic but I’m trying to give you the benefit here). 5% discount rate, which is also generous considering that doesn’t include inflation. Let’s say 30 years. NPV is $2.495M.

    2) MBA. First two years are -$100k (pay for MBA, again it’s probably not quite that because you would have been paying for living expenses anyway and you don’t pocket your whole salary due to taxes, etc, but more benefit for you).

    Starting salary at Age 32: $138k. Use 4% raise every year, 5% discount rate: NPV is $2.692M.

    This isn’t even considering that someone making $100k who never gets an MBA could be career limited, this is simply numbers over time. It’s also not including the network you would have access to upon graduation to help ensure so

    You may say, hey I can get more than 5%! Ok, let’s look at 8%. “Normal” NPV is $1.694M, MBA is $1.709M. So the breakeven is just over 8%.

    If you can make risk free 8% real rate of return (no inflation) you certainly don’t need an MBA. Except no one in PE will hire you without an MBA so you hopefully have some rich friends or are rich yourself.

  • Cloud

    Calculate the roi if paying out of pocket for any of these schools and I assure you there are negative returns.

  • John

    why do you refuse to references your sources?
    I find it had to swallow any of your claims when you state no sources

  • JohnAByrne

    Sure. U.S. News adjusts the numbers for the percentage of grads who actually receive starting bonuses. Not all grads get a sign-on bonus. Rather than add the two numbers–salary and starting bonus–together, U.S. News adjusts the bonus total across the entire class. So if half the class received an average bonus of $10,000 each, it would come to an average of $5,000 per graduating MBA. In almost all cases, then you are looking at a true average for the class.

  • Maria

    John, could you please explain why there is a difference between figures in USN and employment reports of the schools? for example according to Vanderbilt latest report of class of 2013, the average total pay (base + bonus) is approximately 120000! why it is 113 here?! similar applied to many schools on the list!

  • Norbert Weiner

    I agree with RealisticMAN.

    And for what it’s worth, I would like to see this data by sector or at least excluding non-profit or government work. I think Yale’s salary metrics may be skewed for the proportionally higher number of graduates that go into non-profit or government. The Yale salary data for most non non-profit or government sectors are on par with the M-7. Perhaps a future article John??

  • MitEngineer

    John, typos again! more than $1,5000 extra.

    lower than they were five years ago in 2008.

    Tighten it up!

  • guest

    it would be a more interesting story if we adjust for inflation. Harvard’s CAGR is around 1.3%, I’d assume inflation is closer to 2-2.5%, anything below 9% growth may actual be a decline over that 5 year period

  • RealisticMAN

    I believe its not about quality of HBS or SGSB, it is due to emerging of good schools across US. Pays at schools such as Tepper, Vanderbilt, UT Austin are at all time high, and in certain sectors they match of those of HBS and Stanford. This is just an indicator that good business education is no longer at HBS or Wharton, but in fact all the top 20 or 30 schools provide the same. We see top banks, Private equity firms, MBB, all recruit on campuses of schools that were not core before.