There’s the Fortune 500 which ranks and stacks the top 500 corporations by annual revenue.
There’s the Forbes 500 which ranks companies by stock market valuation.
And now there’s the Poets&Quants’ market value creation rank for the top business schools in the U.S..
As is true with either the Fortune or Forbes 500, size does indeed matter. So it will come as no surprise that the estimated value of the graduating Class of 2014 at Harvard Business School–based on the total compensation paid to 905 members of that class–significantly beat every other MBA program. The class’ market value: $141 million.
ONLY THREE U.S. MBA PROGRAMS GRADUATED CLASSES WORTH MORE THAN $100 MILLION
In fact, only three MBA programs in the U.S. topped the $100 million mark. Wharton, which had 815 graduates in its Class of 2014, put MBAs into the market worth $122.3 million. Columbia Business School, wit hits 719 full-time MBA graduates in 2014, was third with $104.8 million.
Rounding out the top five were the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management. Booth came in at $82.9 million, while Kellogg was close behind at $80.0 million.
The analysis by Poets&Quants include average salary, bonus, and other compensation multiplied by the number of graduates in a school’s class. The numbers are meant to be estimates of what employers would pay if all the members of a graduating class were available for hire. In essence, then, the sum captures the near-term “value” of the MBA graduates a school puts into the marketplace.
HIGHEST TOTAL COMPENSATION PACKAGES WENT TO STANFORD
While the “market value” of an MBA class may have be relevant to a business school’s potential near-term impact, the more revealing numbers for applicants and students alike may well be the total compensation packages received by graduates. Though Stanford University’s Graduate School of Business ranked seventh among U.S. schools, graduating 393 MBAs in 2014, for example, its grads nailed down the largest average total comp per person: $169,274.
That number includes average starting base salary, signing bonus, and other first-year compensation. The number, moreover, is weighted by the proportion of graduates who reported sign-on bonuses and other compensation so it reflects the true average comp for a class’s MBAs since not all graduates get signing bonuses or other first-year compensation.
MBA pay, looked at this way, includes quite a few surprises. Stanford grads on average are pulling down pay packages that are nearly $14,000 higher than the MBAs at HBS. If you look at average salary and sign-on bonus, it’s very close. The big difference is in ?other compensation” reported by 37.5% of Stanford’s class vs. 16.5% of Harvard’s class, or an average of $70,505 at the GSB vs. $63,216 at HBS. And it must be said that these are conservative numbers. The average pay package figures do not include tuition reimbursement, relocation expense reimbursement, auto allowance, profit sharing, 401K match, stock or stock options.
ONLY SEVEN U.S. MBA PROGRAMS SAW MBA GRADS LANDING $150K OR MORE PAY PACKAGES
That’s not the only surprise. The MBAs at UC-Berkeley’s Haas School of Business actually scored higher average total comp packages than HBS grads: $157,347 vs. $155,817, respectively. Credit the super expensive Bay Area and the perks companies are awarding for MBA talent. Dartmouth College’s Tuck School of Business was fourth in total compensation, with Tuck MBAs averaging $155,037.
Another big shocker in the data was the strong showing by the University of Michigan’s Ross School of Business where average comp packages hit a school record $151,838. Also somewhat surprising was the market performance of MBAs from Duke University’s Fuqua School where the average compensation packages totaled $152,352. Those numbers even exceeded the averages at Wharton which posted a $150,113 mean comp package.
In all, only seven U.S. schools delivered average compensation of $150K or up: Stanford, Berkeley, Harvard, Dartmouth, Duke, Michigan, and Wharton. Just missing that level of total pay were Columbia Business School, where the average comp was $148,060, MIT Sloan, where the average was $147,561, and the Darden School of Business at the University of Virginia whose MBAs landed average starting compensation of $145,434.
(See following page for our interactive table on compensation at the top 25 U.S. MBA programs)