Total MBA Pay Above Pre-Crash Levels

Tuck School Dean Paul Danos is the longest-serving dean of any highly ranked business school. (Photo by Joseph Mehling)

Tuck School Dean Paul Danos is the longest-serving dean of any highly ranked business school. (Photo by Joseph Mehling)

The dean of Dartmouth College’s Tuck School of Business is predicting what he calls a “positive growth slope in overall applicants to full-time programs” in the years ahead. His optimism is based on the MBA degree’s recovering return-on-investment at the best business schools.

Graduates of the top MBA programs, he said, are now receiving total pay packages that exceed pre-crash levels for the first time.

Even so, Paul Danos, currently the longest-serving dean of an elite business school, is advising most business schools to consider diversifying away from the full-time MBA because existing programs more than adequately fulfill current demand.


Danos, who will step down as dean at Tuck on July 1 after a 20-year stint in the job, made his remarks at a leadership conference of the Graduate Management Admission Council in Long Beach, CA, on Jan. 23. In 2014, Danos was named Dean of the Year by Poets&Quants, which obtained a transcript of his remarks as well as detailed notes from a conference observer.

His upbeat assessment for business education sharply contrasts with an earlier forecast by UC-Berkeley’s Haas School of Business Dean Rich Lyons that half of the business schools in the U.S. could be out of business within five or ten years (see Can Half The Business Schools Really Go Out of Business?).

Entitled “The Past, Present and Future of Graduate Management Education,” the talk touched on all the converging forces that have been putting formidable pressure on business school deans in the past decade: globalization, technology, changing demographics, and the increased demands of employers who want graduates who can jump into their jobs and perform immediately. The speech by the elder statesman of graduate business education is both an astute and thoughtful summation of the state of the market.


Danos acknowledged declining numbers of GMAT test takers which show that the available pool of applicants to graduate business programs has diminished in recent years. Nonetheless, he noted, there has been no significant consolidation or concentration in the industry, and he gave no indication that consolidation is expected.

“The size of the total of the established programs for which the GMAT exam is required (and/or the GRE) in relation to the total market for business education has gotten smaller,” he said. “While the overall market has zoomed up worldwide in the last thirty years, the size of the full-time MBA student body at places like Stanford, Harvard, Wharton, Kellogg, Tuck, Booth, etc. and those at the top public schools such as those at the Universities of Michigan, Virginia, California, Illinois, Texas, etc. have not grown dramatically, if at all.”

Still, added Danos, “thousands of individual units seem reasonably viable, if not growing…Alternatives to the full-time program such as distance and for-profit MBA programs are growing, but that has not caused the top traditional programs to shrink very much, with some exceptions.”


“I predict that a positive growth slope in overall applicants to full-time programs will come back strong particularly given the ROI of the top programs. Placement, in our tradition MBA program is probably as robust as ever, with over 95% of the graduates reporting employment success within 90 days of graduation at the top 10 schools. And the total pay packages are exceeding pre-crash levels.”

Average starting salaries at Danos’ school hit $117,860 this year, up 2.5% from $115,031 a year earlier. Average signing bonuses–reported by 87% of the class–were $28,712, while other guaranteed compensation averaged $34,431. For a graduating student who collected all three forms of compensation, the average would have totaled a whopping $181,003–to start.

Concluded Danos: “The full-time residential MBA is a huge market, but not a growing market. It is scrutinized and ranked, but there are more and more alternatives. Looking at a younger cohort and offering distance programs with technology will be important for most business schools, especially those that are now primarily in the traditional mode.”

Paul Danos' recommendations to other deans

Paul Danos’ recommendations to other deans

Questions about this article? Email us or leave a comment below.