Consulting & Energy Up At Yale SOM

Yale School of Management

Yale School of Management

In common with most other top business schools, an increasing number of MBAs at Yale School of Management had job offers three months after graduation this year and more of them had accepted their offers of employment. In its 2014 employment report, Yale said that 93.1% of the Class of 2014 had job offers three months after commencement and 88.9% accepted those jobs, up from 91.1% and 85.2% in 2013, respectively.

But contrary to the employment reports of many schools, the percentage of students going into technology fell by more than six full percentage points to 10.4% this year, down from a high of 16.8% in 2013. The slack was taken up by consulting, which landed 26.0% of the class, up from 22.0% a year earlier, and the energy industry, where an impressive 6.3% of Yale MBAs accepted jobs, up from only 1.7% in 2013.

The median base salary of a Yale MBA remained the same: $110,00 to start, a number that is slightly below this year’s median at either the University of Michigan or Duke University’s Fuqua School of Business. But the other year-end guaranteed compensation, including sign-on bonus, rose by $5,000 to $35,000 this year. The consulting industry paid the highest compensation packages at the school, offering a median $135,000 plus a median $30,000 bonus, for a total of $165,000.

CONSULTING PAY PACKAGES AT YALE EVEN EXCEEDED WHAT MBAS THERE GOT IN PRIVATE EQUITY

Surprisingly, perhaps, that level of pay was even better than what MBAs at Yale received by going into either private equity or venture capital, industries that often dangle the highest pay packages in front of graduating MBAs. Yale said that students who took jobs in PE/VC firms reported median base salary of $120,000 and other guaranteed compensation of $32,500 for a total of $152,500, some $12,500 less than the consultants.

Yale is the latest school to report its 2014 employment numbers. Among the major business schools that have yet to issue reports on the Class of 2014 are Northwestern University’s Kellogg School of Management, New York University’s Stern School of Business, UC-Berkeley’s Haas School of Business, and Carnegie Mellon’s Tepper School.

Overall, finance drew just about as many members of the Class of 2014 as consulting. Some 25.5% accepted jobs in consulting, roughly the same as the 25.4% who went that route a year earlier. In fact, the finance crowd at Yale has remained surprisingly stable in the past three years. The big drop in finance at Yale occurred three years ago, falling to 25.0% of the Class of 2012 from 39.0% a year earlier.

INVESTMENT BANKS PAID THE MOST ‘OTHER GUARANTEED COMPENSATION’

The highest other guaranteed compensation was paid by finance this year. MBAs who went into investment banking, where the median salaries were $100,000, reported median other comp of $60,000, still a tad below the $165,000 total for consulting.

Yale students who chose the non-profit and government sectors declined this year to 7.8%—still higher than most other top business schools but down from 10.4% a year earlier and 9.0% in 2012. Otherwise, media and entertainment increased its share of the class, recruiting 4.7% into jobs this year, versus 2.3% in 2013.

Yale said that more than 250 employers hired its students this year, a total that includes companies which employed students as summer interns. Yale does not report high and low compensation numbers for its graduates, preferring to disguise those numbers by reporting on the 25th and 75th percentile comp figures. The school also does not report its major employers.

MORE STUDENTS LAUNCHING THEIR OWN BUSINESSES OUT OF YALE

MBAs who decided to start their own businesses in school also rose to 14 out of the class of 247, up from 10 students out of 230 in 2013. That number is expected to grow with future SOM classes. “We have a huge number of students who are becoming entrepreneurs and starting companies and they have been clamoring for more courses,” says Kyle Jensen, the director of entrepreneurial programs at Yale. SOM added six courses in entrepreneurship this year alone. “I held that the state of entrepreneurship is akin to a champagne bottle. It has been shaken but the cork is still in the bottle. ur job each day is to get the cork out of the bottle. To choose entrepreneurship still feels unusual and risky. To prove it is a worthy endeavor is a little bit of a struggle.”

This year, however, the school has set up five post-graduate fellowships for entrepreneurs under which SOM will take on graduating student debt for the first two years so startup founders don’t have to make any payments on their debt. “If it’s successful, we will expand that,” says Jensen.

How Yale’s Class of 2014 Compares

With Other Top Business Schools

 

School Median Base Sign-on Bonus Other Bonus Jackpot Graduation Offers Offers 3 Months Later
Harvard $125,000 $25,000 $34,700 $184,700 88% 93%
Stanford $125,000 $25,000 $31,500 $181,500 80% 94%
Wharton $125,000 $25,000 $27,000 $177,000 88% 98%
MIT Sloan $124,400 $25,000 $20,000 $169,400 85.9% 94.6%
Chicago $120,000 $25,000 $26,000 $171,000 89.8% 98.0%
Columbia $119,400 $25,000 $22,390 $166,790 83% 97%
Dartmouth (Tuck) $116,000 $25,000 $25,000 $166,000 91% 98%
Michigan (Ross) $115,000 $25,000 $16,750 $156,750 89% 93%
Duke (Fuqua) $111,000 $25,000 $15,000 $151,000 87% 94%
Yale $110,000 NA $35,000 $145,000 80% 93%
UCLA (Anderson) $110,000 $25,000 $15,000 $150,000 75% 90%
Virginia (Darden) $110,000 $25,000 $9,500 $144,500 89% 94%
Cornell (Johnson) $106,000 $25,000 $12,500 $143,500 87% 92%
UNC (Kenan-Flagler) $100,000 $25,000 $16,625 $141,625 81% 92%
Texas-Austin (McCombs) $105,000 $25,000 $12,600 $142,600 80% 94%
Emory (Goizueta) $100,000 $25,000 $12,500 $137,000 90.4% 98.0%
Vanderbilt (Owen) $100,000 $15,000 $12,000 $127,000 83% 94%
Washington (Olin) $100,000 $15,000 NA $115,000 86% 97%

Source: Business school employment reports & P&Q reporting

Notes: Jackpot refers to graduates receiving the median of all three forms of compensation: salary, signing bonus, and other year-end guaranteed bonus. Not all graduates are given all three. At Stanford, for example, sign-on bonuses this year were collected by half the class, while 38% of the MBAs received other year-end guaranteed compensation. An asterisk indicates average numbers rather than medians.

Differences in pay often reflect industry choices and geography. Stanford’s higher median base can largely be attributed to the fact that 12% of this year’s class went into private equity, which currently pays the most lucrative comp packages to MBAs. The median PE starting base salary this year was $170,000. At Tuck, for example, only 4% of this year’s class went into private equity and the base for those PE jobs was just $120,000.

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