Dartmouth and Cornell, for example, tout their remote locales, where students can develop more intimate relationships and focus without big city distractions – luxuries they won’t enjoy after graduation. Stanford tends to attract change-the-world free-thinkers – the types of people who struggle with the restrictions, self-interest, and deference inherent to company dynamics. And Notre Dame and Georgetown – both Catholic institutions – wrap their curriculum into a values-based package that often runs counter to the win-at-all-costs and circle-the-wagons ethos of many organizations.
By its nature, PayScale also attracts graduates who are, to an extent, dissatisfied. They are visiting the site to learn what they are worth in the labor market, indicating that they are considering a new job or career change. Even more, by using a public website – as opposed to tapping their network – PayScale survey participants reveal themselves to be more isolated members of their classes, ones who exercise less control over their careers.
And this doesn’t factor in two other flaws. First, PayScale’s survey doesn’t separate full-time MBAs from executive and online MBAs, which possess their own distinct subcultures and expectations. Even more, this “meaning” survey doesn’t separate MBAs based on early career and mid-career, which could theoretically yield altogether different sentiments.
DOES A SANTA CLARA MBA REALLY MAKE AS MUCH AS A STERN GRAD?
And that’s just the tip of the iceberg. The PayScale framework and sample also potentially skews the salary data. Using a database that includes 1.4 million college graduates, PayScale offers salary data for 232 MBA programs. According to PayScale’s salary report methodology page, each school averages 325 graduate profiles (with school profiles ranging from 50-4,000 profiles). However, this data is not broken out for MBA programs. As a result, it is unclear (if not unlikely) whether that this 325 graduate average applies to each of the MBA programs listed. In other words, you don’t know for sure whether each school’s data is based on a larger and smaller sample. As a result, it is hard to make comparisons when school data may not be aligned (or weighted).
PayScale annual pay is divided into two categories: Early career pay (Median salary for 0-5 years) and mid-career pay (Median salary for 10+ years). However, this model fails to account for bonuses – a major incentive for banking professionals – or equity (Think entrepreneurs and senior executives). How does this translate to real dollars? Look at the Wharton Class of 2014, which averaged $123,431 base salaries to start. Their signing bonuses alone added another $29,229 (nearly 20%) to their incomes. And that doesn’t include “other compensation,” which tacked another $49,958 onto to some graduates’ earnings.
Why is this important? For starters, based on PayScale methodology, Santa Clara Leavey grads supposedly earn as much at the midpoint of their career — $152,000 – as alumni from New York University (Stern). And that’s the same Stern that’s the leading feeder school to high-paying investment banking gigs with firms like Goldman Sachs and Morgan Stanley. In 2014, Poets&Quants partnered with PayScale to calculate the 20-year earnings of MBAs using base salaries, cash bonuses, and profit sharing (in today’s dollars). In this model, Stern grads earned $131,975 in starting pay and bonuses in their first year out – and had made $2,639,000 over a 20 year span. As you’d expect, Santa Clara didn’t even crack the top 50.
Or, take it from this angle. For the Class of 2014, U.S. News reports – using school data – that Leavey grads earned an average base of $57,000 (with the highest reported salary being $157,000), along with a $6,500 average signing bonus. At Stern, those numbers were $112,096 and $31,163 (with the highest reported base being $200,000). In short, Leavey grads make less than half of what Stern grads make at the start. And that’s an awful lot of ground to make up.
PACE IS THE PLACE TO MAKE BIG BUCKS?
Indeed, the PayScale salary report is littered with head scratchers. By mid-career, Pace University MBAs supposedly earn nearly as much ($145,000) as MBAs from the University of Michigan’s Ross School of Business ($146,000). Technically, that also means they pull down more than grads from Georgetown, Notre Dame and USC, which are bottlenecked together at $143,000. Using this same measure, San Jose State MBAs, according to PayScale data, gross more at mid-career than North Carolina, Indiana, Texas, and Minnesota grads. By the same token, Cal Poly San Luis Obispo MBAs clear more by mid-career than graduates from highly-regarded programs like Texas A&M, Purdue, Maryland, Pittsburgh, and Arizona State.
However, the most damning numbers involve the salary clusters under the mid-career category. Here, there are ies between three or four schools at 21st ($143,000), 26th ($139,000), 30th ($138,000), 37th ($135,000), 40th ($134,000), 44th ($133,000), and 47th ($132,000). Even more dubious, there is six school tie at 50th ($131,000) and a seven school tie at both 74th ($124,000) and 96th ($120,000). It’s a mathematical fact: The more data you collect, the more distinct that data sets become. And the number of ties between schools in the mid-career average salary begs the question: Just how many profiles are actually part of each school’s supposed graduate pay?
To find PayScale salary and meaning data for the Top 50 MBA programs, go to the next page.