MBA pay often comes down to three factors. It starts with school. On average, higher rank means higher starting pay. Industry also plays a role, with finance and consulting grads traditionally landing the best packages. Over time, these factors give way to something with even greater long-term impact: geography
Take Wharton, a household name with facilities on both coasts. The east coast attracted the largest contingent of 2016 Wharton graduates — 253 in all (or 39.5% of the class who reported their base pay). On average, these Wharton graduates hauled in $133,855 in base pay. That was $7,000 more than their West Coast counterparts (which included 18.6% of the graduating class). While the East and West Coasts are presumed to pay more, Wharton grads actually found better base pay in the Midwest ($138,638) and South ($135,588). True, those regions attracted a combined 36 graduates from the graduating class. However, they reflect a truism: A Wharton MBA conveys prestige and know-how regardless of where its graduates ultimately choose to work.
On the surface Washington University might be considered a regional player. In 2016, two-thirds of Olin graduates who reported their base pay chose opportunities in the Midwest. It is a choice that costs them dearly, with graduates earning just $98,161 to start. Out east, where 12 graduates found jobs, that average jumped to $111,818. On the West Coast, the Class of 2016 cashed in at $124,714. Turns out, the Midwest is the lowest-paying region for Olin grads. Worse yet, Midwest employers coughed up higher base pay for MBA talent at programs like Rutgers and Texas A&M. Where’s the issue? You can’t say Olin grads aren’t beloved by employers, since the school historically ranks among the top MBA programs for placement. Instead, the gap likely stems from Olin Midwest grads being unaware of their true worth. By remaining fixated on the Midwest and starting slow out of the gate, they cost themselves over $10,000 a year in base pay alone — which could mushroom to $250,000 loss, at minimum, over the next 25 years.
Then, there are programs with deep footprints in some regions that barely dent the surface in others. Case in point: The University of California-Berkeley’s Haas School of Business. Among the 204 graduates who reported their base pay in 2016, 146 found work in the West, earning $125,492 to start. The Southwest and East Coast drew 17 Haas grads, paying them almost identical to West Coast employers. The pay isn’t the most telling number. That number is five —the total number of 2016 Haas graduates who accepted jobs in Middle Atlantic, Southern, and Midwestern states combined. These numbers were so small that U.S. News didn’t even bother to list salary data associated with them — no different than the 2015 class. Such data could signal incongruent student and employer tastes. Or, it could mean that employer outreach and alumni networks are frail in these regions. Either way, it relegates Haas to a regional power.
LOCATION ULTIMATELY DICTATES PAY, NETWORKS, AND OPPORTUNITIES
Each of these examples exposes how regional pay reflects school value and reach. Wharton grads can basically write their own ticket wherever they go. At Olin, MBAs’ penchant for choosing Midwest employers levels off their early earning prospects. While Haas may be a national brand, the program’s recent placement history suggests that most job opportunities will arise from employers west of the Rockies. Such data can offer a clue to the types of connections, support, and interest that MBAs will find at particular schools.
What is the going rate in various regions? How well do employer offers compare with what students should expect? These are questions that Poets&Quants answers each year by reviewing the base pay for over 50 top American MBA programs (along with overseas nations as a whole). Here, MBA applicants and students can uncover their degree’s worth in the marketplace, giving them a tool to negotiate the best starting pay packages.
Mind you, the data doesn’t provide the compete picture. Notably, it doesn’t include sign-on bonuses or additional compensation, such as tuition reimbursement or stock options. The reason? Inconsistency. For example, the 2016 employment reports for top tier programs like Chicago Booth, Northwestern Kellogg, Dartmouth Tuck, and MIT Sloan only capture base salary by region, making across-the-board comparisons impossible. Even more, bonuses and other carrots are simply one-year inducements that become irrelevant after the first year of employment (You can find 2016 average bonus and additional compensation here).
The data is also raw, meaning it has not been adjusted for cost of living (which can be calculated here). Class representation can also sway the numbers. The Midwest is a case in point. Here, Wharton graduates earned $20,000 more in starting base over their Stanford counterparts. Then again, they also outnumbered Stanford by a 19-to-4 margin, meaning one high or low base can easily knock a smaller population’s pay out of whack.
Location is often described as destiny. To see the average, high, and low starting base pay by region and school, click on the links below.