Harvard MBAs Doubled Their Income In Six Years — How Did Your School Do?

moneytreeThere’s only one business school in the world where MBA graduates doubled their starting compensation six to eight years later. Guess which one it is?

Harvard Business School.

Among the wealth of data collected by Bloomberg Businessweek for its 2015 ranking of full-time MBA programs, the most compelling of all is the compensation figures for alumni. The magazine asked alums how much money they were making before going to business school, how much they made in their first post-MBA jobs, and finally how much compensation they are pulling down six to eight years later.

Harvard MBAs topped the list with the highest annual compensation at a breathtaking $290,000, exactly double the $145,000 they made immediately after graduation. When they came to HBS, they left jobs paying on average $75,000. Those numbers put the averages for the 103 schools to shame. Over the entire sample, MBAs saw a tidy 81% jump over their median compensation before  business school. After six to eight years, pay typically increased another 64%, to about $169,000 a year.


Of course, MBAs from many of the most highly selective schools racked up great numbers as well. Stanford University’s graduates were the second highest compensated alumni with annual pay of $277,500, while the University of Pennsylvania’s Wharton School MBAs pulled down $270,000 a year. Columbia Business School was next with MBA alums earning $245,000 a year in compensation. The highest paid non-U.S. school to make the list is London Business School and IMD in Switzerland whose alumni are tied at $230,000 a year.

Alumni compensation equalled or exceeded $200K at only 15 schools in the world, including MIT Sloan ($241,500), Chicago Booth ($240,000), UC-Berkeley Haas ($230,000), Northwestern Kellogg ($225,000), Dartmouth Tuck ($220,000), INSEAD ($211,682), New York University Stern ($208,000), UCLA Anderson ($200,000), and SDA Bocconi in Italy ($200,000).

Not surprisingly, the most highly paid alumni tend to go into business school leaving jobs at which they were well paid. Incoming MBAs at Stanford and Wharton made the most money before going to business school, each averaging $80,000 a year. Harvard, Columbia, Kellogg and IMD students were next, all leaving jobs that paid $75,000 annually. Chicago Booth and London Business School alums gave up positions that paid $72,500 a year to go to those schools.


The school’s alums who quit the lowest paying jobs and yet now have positions that are paying at least $150,000 in compensation? Alums of Manchester Business School in the United Kingdom say they entered the MBA program with $40,000-a-year jobs and now are making $150,500 six to eight years later.

Though compensation was self-reported by alumni responding to Businessweek’s survey, the numbers appear pretty reliable. The magazine defined compensation as current base salary plus guaranteed and discretionary additional income earned in 2014, excluding signing bonuses. Alums who who got MBAs in joint-degree programs were excluded from the analysis since their career paths may differ systematically from regular MBAs. The data set is based on 12,773 survey responses from alumni in he classes of 2007, 2008, and 2009. The survey has a 29.4% response rate.

All told, there are 44 schools whose alumni now make $150,000 or more a year, a dozen of them are non-U.S. business schools. And there are quite a few surprises that make the cut. Babson College MBAs are in the $150K group, along with alumni from Texas A&M and Wisconsin Business School.

(See the following page for our analysis of the compensation data at schools where alums make $150K and up)

  • bwanamia

    My sense is that higher GSB salaries vs. HBS & Wharton reflect concentration of GSB grads in SF vs. NYC. Similarly, higher HBS & Wharton salaries vs. Kellogg & Chicago reflect concentrations of HBS & Wharton grads in NYC vs. Chicago.

    HBS, Wharton, Chicago & Kellogg all hold up pretty well when location & COL is taken into account, but Columbia seems to be struggling.

  • C. Taylor

    A few words of caution:

    1) This type of number is a fairly volatile snapshot. On any given survey, an institution’s median could vary by $30,000 or more.
    2) Total liquid compensation–including, for example, the value of exercised options–is the best number to obtain and should be adjusted for PPP. It isn’t clear that is what BB-BW is presenting. Forbes uses the correct number. FT modifies the number to fit a set mix of numbers–which is useful for some purposes, but which I find opaque and actually misrepresentative of some programs.

    3) TIme frames are important. Three years out from graduation is a little early. Eight years out is likely not as meaningful for current applicants as five or six years out. Applicants are generally three years out from graduation when applying. Data from eight years earlier is eleven years off from their graduation and might represent an MBA program of yesterday. A lot can happen in a decade.

    Given these issues are appropriately accommodated for, I like this type of approach.

  • C. Taylor

    I agree that total compensation should be used for both initial and final compensation. PPP is important. Median is better than mean here.

  • JohnAByrne

    I don’t believe so, though Bloomberg Businessweek isn’t clear on that.

  • Quyen

    Is this normalized for the Cost of Living variances across the US? ($120k in Houston is $175k in Boston for example)

  • JohnAByrne

    Just cash compensation which is a very good point, indeed. If equity were included, these numbers would be higher across the board, especially at the big brand schools where more students are going into early stage and tech companies.

  • JohnAByrne

    These are median numbers so half of the alums made more and half made less. No breakdowns by industry are available, though one would naturally assume that finance rules the roost here followed by consulting.

  • devils0508

    Is this median or average? Any break down by industry (e.g. people who exited into finance, consulting, tech, brand management)?

  • Show me the money

    John, does this include equity stakes or just cash compensation?